A-share subscription | Hengkun New Materials (688727.SH) opens for subscription. The net profit for the reporting period is approximately 2.9 billion yuan.

On November 7, Hengkun New Materials (688727.SH) started its public offering, with an issue price of 14.99 yuan per share and a maximum subscription of 10,500 shares. The price-to-earnings ratio is 71.42 times and it belongs to the Shanghai Stock Exchange. China Securities Co., Ltd. is its sponsored. According to the prospectus, Hengkun New Materials is dedicated to the research, development, and industrial application of key materials in the field of integrated circuits. It is one of the few innovative enterprises in China with the capability to research and produce key materials for 12-inch integrated circuit wafers. The company mainly engages in the research, production, and sales of lithography materials and precursor materials. During the reporting period, the company's self-produced products mainly include lithography materials such as SOC, BARC, KrF photoresist, i-Line photoresist, as well as precursor materials such as TEOS. ArF immersion lithography photoresist has been validated and sold on a small scale, mainly used in the production and manufacturing of advanced NAND, DRAM storage chips, 90nm technology nodes and below logic chips. In addition, with the increasing demand for domestic replacement of the integrated circuit industry, the company has introduced overseas products as an entry point to quickly access customer resources, accumulate product introduction and quality control experience, introduce and sell lithography materials, precursor materials, electronic specialty gases, and other wet electronic chemicals, etc., key materials for integrated circuits. Currently, 12-inch integrated circuit lithography materials and precursor materials in China are still dominated by foreign manufacturers, while domestic key material manufacturers have made breakthroughs but have not yet formed a large-scale mass production supply situation in advanced processes. The company is one of the few domestic enterprises to achieve mass production and supply of lithography materials and precursor materials. According to Frost & Sullivan market research, in 2023, the company's sales of SOC and BARC rank first among domestic manufacturers in the domestic market. In 2024, the company's self-produced product sales revenue was 344.1893 million yuan, achieving the replacement of similar products from overseas manufacturers such as Nitto Denko, Shin-Etsu Chemical, DuPont in the United States, Merck in Germany, Synthetic Rubber in Japan, and Tokyo Applications Chemistry, becoming one of the major suppliers of integrated circuit lithography materials and precursor materials in China, covering a wide range of mainstream 12-inch integrated circuit wafer fabs in China. The prospectus warns of operational risks faced by the company, including the risk of terminating cooperation with product suppliers or significant adverse changes in transaction conditions; the risk of high customer concentration and dependence on a single customer; and the risk of negative gross profit margin for self-produced precursor materials. Financially, the company achieved operating income of approximately 322 million yuan, 368 million yuan, and 548 million yuan in the years 2022, 2023, and 2024 respectively. During the same period, the company's net profit was approximately 99.7283 million yuan, 89.7626 million yuan, and 96.9111 million yuan.