IPO News | Top Numerical Control, the 'first commercial aerospace stock' in Hong Kong, has launched its IPO and is expected to be listed on May 20, with a minimum subscription amount of HKD 2,665.61

Futu Information reported on May 12, $TOPNC (07688.HK)$ Announcement issued: The company will offer shares from May 12 to May 15, with a planned global offering of approximately 65.33 million shares, and is expected to be listed on May 20.

Company Overview

Top Numerical Control is a company in China that focuses on the research, design, production, and sales of high-end intelligent manufacturing equipment (mainly five-axis CNC machine tools). The company concentrates on developing five-axis CNC machine tools to meet the advanced manufacturing needs of China's aerospace sector. During the performance record period, the company expanded its market reach to general industry sectors including automotive, energy, medical equipment, shipbuilding, machine tool equipment, and mold manufacturing.

Since its establishment, the company's products have been applied across the manufacturing supply chain for commercial aircraft, aerospace engines, and carrier rockets, gaining recognition from several leading manufacturers and their supply chain partners. The company has established business relationships with leading aerospace groups for over a decade, creating opportunities to further expand its cooperation network with other subsidiaries and affiliates within the same group.

Financial Summary

In fiscal years 2023, 2024, and 2025, Top Numerical Control reported revenues of RMB 334.6 million, RMB 531.6 million, and RMB 578.0 million respectively. In fiscal years 2023, 2024, and 2025, the company recorded gross profits of RMB 115.8 million, RMB 199.9 million, and RMB 204.4 million, with gross profit margins of 34.6%, 37.6%, and 35.4% respectively. In fiscal years 2023, 2024, and 2025, the company incurred R&D expenses of RMB 89.9 million, RMB 85.9 million, and RMB 106.8 million respectively.

Source: Prospectus

Use of Proceeds

In terms of the use of proceeds, Topper CNC estimates that the net proceeds from the global offering will amount to approximately HKD 1.606 billion (assuming the over-allotment option is not exercised, with an offer price of HKD 26.39). According to the prospectus, Topper CNC plans to allocate the funds raised from the global offering for the following purposes:

Approximately 61.8% will be allocated to research and development advancements; 10.3% will be used to expand the sales and marketing network; around 12.1% will be allocated for potential acquisitions and investments in key component manufacturers (such as servo drives and direct-drive torque motors), which are essential for the company's precision machining capabilities and future product development; about 6% will be used to repay part of the group’s interest-bearing bank loans to improve the company’s financial position and liquidity; approximately 9.9% will be allocated for working capital and general corporate purposes.