New Stock News | Luxcomfort (02698) IPO ends, oversubscription reaches HK$32.31 billion, oversubscribed 1356 times.

Baby diaper manufacturer Loyal Comfort (02698) launched its IPO from October 31 to November 5. As of the end of the IPO on Wednesday, preliminary statistics show that the subscription amount for Loyal Comfort amounted to a staggering 323.1 billion Hong Kong dollars, far exceeding the public offering of 2.38 billion Hong Kong dollars, oversubscribed by 1356 times. According to the IPO plan, Loyal Comfort plans to issue 90.884 million shares, with an IPO price range of 24.2 Hong Kong dollars to 26.2 Hong Kong dollars, raising up to 23.8 billion Hong Kong dollars. Each lot consists of 200 shares with an entry fee of approximately 5292.9 Hong Kong dollars. Loyal Comfort does not have a mandatory clawback mechanism, with 10% of shares available for public offering. The joint global coordinators and joint bookrunners may exercise discretion to increase this to a maximum of 15%. The company is expected to be listed for trading on November 10, with CICC, CITIC SEC, and GF SEC as its joint sponsors. Information shows that Loyal Comfort is a multinational hygiene products company focused on rapidly developing emerging markets in Africa, Latin America, and Central Asia. It is mainly engaged in the development, manufacturing, and sales of baby diapers, baby pull-up pants, sanitary napkins, and wet wipes for babies and women. Its brands include Softcare, Veesper, Maya, Cuettie, and Clincleer, with product sales covering over 30 countries in West Africa, East Africa, and Central Africa. Most of Loyal Comfort's revenue comes from sales to African customers. Based on the first four months of this year, East Africa accounts for 46.5% of Loyal Comfort's revenue, West Africa accounts for 39.5%, Central Africa accounts for 10.6%, while Latin America and Central Asia account for 3.3% and 0.1% respectively. According to Frost & Sullivan data, Loyal Comfort ranks first in the African baby diaper and sanitary napkin markets by sales volume in 2024, with market shares of 20.3% and 15.6% respectively. By revenue in 2024, it ranks second in the African baby diaper and sanitary napkin markets, with market shares of 17.2% and 11.9% respectively. The founders of Loyal Comfort are the Chinese couple Shen Yanchang and Yang Yanjuan, who together hold 64.42% of the shares. Shen Yanchang worked in Nigeria in 1997 and returned to mainland China to start a business in 2004. The prospectus shows that the couple's declared address is in Kai Tak, Hong Kong. As for cornerstone investors, Loyal Comfort has attracted BA Capital, Arc Avenue, Arcane Nexus, Beijing Shunao, CDH Emerging Markets, HCEP, NewTrails, South Fund, Rich Fund, E Fund, Charisma Mega, TruMed, Qihuirunjin, Huaxia Fund (Hong Kong), Jane Street as cornerstone investors, with a total investment of 139 million US dollars (approximately 10.8 billion Hong Kong dollars). If the price is set at the upper limit of 26.2 Hong Kong dollars, the subscription amount of cornerstone investors already accounts for 45.34% of the initial issuance size. Regarding the use of funds raised, the net proceeds of Loyal Comfort are allocated as follows: 71.4% towards expanding overall production capacity and upgrading production lines; 11.6% towards marketing and promotional activities in Africa, Latin America, and Central Asia; 4.7% for strategic acquisitions in the hygiene products industry; 0.4% for upgrading CRM systems and gradually implementing them in operations in multiple countries; 2.6% for hiring management consulting companies to analyze new markets and products and provide advice on strategy execution and corporate management; and 9.3% for operating funds and general company purposes.