Tongcheng New Materials (09607) plans to sell 68,187 million shares globally to introduce cornerstone investors such as CNBC Investment and Pulin Chengshan Hong Kong

According to the Zhitong Finance App, Tongcheng New Materials (09607) will raise shares from September 21, 2026 to September 24, 2026. It plans to sell 68.118,700 H shares globally. The Hong Kong public sale accounts for about 10%, and the international sale accounts for about 90%. The offering price is HK$39.00 to HK$4.00 per share, with 100 shares per lot. It is expected that H shares will start trading on the Stock Exchange at 9:00 a.m. on September 29, 2026.

According to reports, the company is a comprehensive supplier of new materials in China. The company is mainly engaged in R&D, production, marketing, sales and distribution of new materials. During the track record period, the company's main business included 3 segments, namely (i) rubber additives for tires and other chemical products; (ii) electronic materials; and (iii) fully biodegradable materials. As far as the tire rubber additives and other chemical products segment is concerned, according to the Frost & Sullivan report, the company ranked first in sales revenue in the global and Chinese phenolic resin rubber additives markets in fiscal year 2025, with market shares of 41.4% and 45.9% respectively. In the field of electronic materials, the company ranked first among local suppliers in the sales revenue rankings of the Chinese semiconductor photoresist market and the Chinese TFT array photoresist market in fiscal year 2025, with market shares of 5.8% and 26.2% respectively.

In fiscal year 2023, fiscal year 2024, fiscal year 2025, the first six months of 2025, and the first six months of 2026, the company's revenue was approximately RMB 2,9373 million, $3,263.4 billion, $3,420.6 billion, $1,650.5 million and $2,131 million, respectively. Of these, the company obtained annual/period profits of RMB404.1 million, $534.2 million, $577.3 million, and $389.1 million respectively.

Assuming a sale price of HK$41.50 per H share, the net proceeds from the global sale would be approximately HK$2,706.1 billion. Of this, about 32.8% is expected to be used to improve the company's R&D efficiency and capabilities. Approximately 21.0% are expected to be used to upgrade and maintain the company's production facilities to enhance the company's production capacity and product competitiveness. Approximately 20.0% is expected to be used for strategic investments and/or acquisitions to achieve the company's long-term growth strategy. Approximately 10.0% will be used to repay bank loans, mainly loans obtained to disburse the company's capital expenses and acquisitions and investments. These loans are interest-bearing at an annual interest rate of approximately 2.24% to 2.45%, and the maturity date is between 2027 and 2031. Approximately 6.2% is expected to be used to expand the company's overseas market layout and supply capacity. Approximately 10.0% is expected to be used for working capital and general corporate purposes.

Additionally, the company has entered into a Cornerstone Investment Agreement with Cornerstone Investors. Based on this, Cornerstone Investors have agreed that, subject to certain conditions, the number of shares to be purchased at the sale price, assuming a sale price of HK$41.50, a total of approximately US$126.4 million can be purchased at the offer price (or induce its designated entity to subscribe). Cornerstone investors include CITIC (Hong Kong) Investment Co., Ltd., Manbang Group Limited, Golden Valley Value Select Master Fund, Goldshore Company Limited, Happy Wisdom Limited, Pulin Chengshan (Hong Kong) Tire Co., Ltd., Mr. Yang Quanhai, and Ms. Zhou Zhou.