IPO Pricing | Higashihara Hitoshi Service was subscribed 4.35 times, priced at HK$11.9 per share

News from Futu Information on April 28, this Thursday$DOWELL SERVICE (02352.HK)$According to the announcement, the company issued 16.6667 million shares, priced at HK$11.9 per share, and 200 shares per lot. It is expected to be listed on April 29.

Higashihara Hitoshi Service received about 4.35 times more subscriptions during the public offering phase, and the final number of shares to be sold was 1,6668 million shares, accounting for about 10% of the total number of shares sold (before any overallotment rights were exercised). A total of 4,379 valid applications were received, with a first-hand winning rate of 17.85%, and a steady one-off of 6 subscriptions.

Furthermore, the international sale was slightly oversubscribed (about 1.56 times), and the final number of shares sold was 14.9999 million shares, equivalent to about 90% of the total number of shares offered (before any overallotment rights were exercised). The relevant data compiled by Futu Information is as follows:

In terms of fund-raising purposes, the company's net proceeds of approximately HK$136 million (assuming no over-allotment rights have been exercised) will be used for the following purposes: about 65% will expand the company's property portfolio and business scale through strategic investment, cooperation and acquisitions, about 16.5% will be used to improve service quality and expand the scope of services along the property management value chain, about 8.50% will be used to upgrade and develop the company's intelligent systems, and about 10% will be used as general working capital.

Higashihara Hitoshi Service is a property management service provider with a long history, providing comprehensive services for many property projects in China. As of December 31, 2021, the company operated in two major regions of China (namely Southwest China and East China).

According to data from the China Index Research Institute, in 2021, the company ranked 52nd and 53rd in terms of total revenue generated in China in 2020 and total construction area under management in China in 2020, respectively.

As of December 31, 2021, the company has 325 property projects under management, including residential and non-residential properties, covering 51 cities in 16 provinces, autonomous regions and municipalities directly under the Central Government of China, with a total construction area of about 28.2 million square meters. Of these, 133 were residential properties and 192 were non-residential properties.

In terms of financial conditions, total revenue from 2019 to 2021 was RMB 559 million, RMB 767 million, and RMB 1,193 million respectively, with a compound annual growth rate of about 46.1% from 2019 to 2021.

Net profit for the same period was 25.6 million yuan, 84.5 million yuan and 130 million yuan respectively, with a compound growth rate of 125.72% from 2019 to 2021.

On the industry side, in recent years, with the acceleration of urbanization and the continuous increase in per capita disposable income, the construction area and number of property projects managed by the top 100 property service enterprises have increased rapidly. The construction area under management increased from about 23.62 million square meters in 2015 to about 48.78 million square meters in 2020, with a compound annual growth rate of about 15.62%.

The average revenue of property services and value-added services of the top 100 property service companies is also growing rapidly. The average annual revenue of the top 100 property service companies increased from about RMB 541 million in 2015 to about RMB 1,173 million in 2020, with a compound annual growth rate of about 16.76%.

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