Red Avenue New Materials Group (09607) plans a global offering of 68.1187 million shares, introducing cornerstone investors including CNCB Investment and PRINX CHENGSHAN Hong Kong.

Red Avenue New Materials Group (09607) is conducting a public offering from September 21, 2026 to September 24, 2026, and plans a global offering of 68.1187 million H shares, with approximately 10% under the Hong Kong public offering and approximately 90% under the international offering. The offer price is HK$39.00 to HK$44.00 per offer share, with a board lot of 100 shares. The H shares are expected to commence trading on the Stock Exchange at 9:00 a.m. on September 29, 2026. It is understood that the company is a comprehensive new materials supplier in China. The company is principally engaged in the research and development, production, marketing, sales and distribution of new materials. During the track record period, the company's principal businesses comprised 3 segments, namely (i) rubber additives for tires and other chemical products; (ii) electronic materials; and (iii) fully biodegradable materials. For the rubber additives for tires and other chemical products segment, according to a Frost & Sullivan report, the company ranked first in sales revenue in both the global and China rubber additives for tires phenolic resin markets in FY2025, with market shares of 41.4% and 45.9%, respectively. In the electronic materials field, the company ranked first among domestic suppliers in sales revenue in both the China semiconductor photoresist market and the China TFT array photoresist market in FY2025, with market shares of 5.8% and 26.2%, respectively. For FY2023, FY2024, FY2025, the first six months of 2025 and the first six months of 2026, the company's revenue was approximately RMB2,937.3 million, RMB3,263.4 million, RMB3,420.6 million, RMB1,650.5 million and RMB2,133.1 million, respectively, of which the company's annual/period profit was RMB404.1 million, RMB534.2 million, RMB577.3 million, RMB358.3 million and RMB389.1 million, respectively. Assuming an offer price of HK$41.50 per H share, the net proceeds from the global offering will be approximately HK$2,706.1 million. Of this, approximately 32.8% is expected to be used to enhance the company's R&D efficiency and capabilities. Approximately 21.0% is 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 borrowings, principally borrowings obtained to fund the company's capital expenditures and acquisitions and investments, which bear interest at an annual rate of approximately 2.24% to 2.45% and have maturities ranging from 2027 to 2031. Approximately 6.2% is expected to be used to expand the company's overseas market presence and supply capabilities. Approximately 10.0% is expected to be used as working capital and for general corporate purposes. In addition, the company has entered into cornerstone investment agreements with cornerstone investors. Pursuant to these, the cornerstone investors have agreed, subject to certain conditions, to subscribe for (or procure their designated entities to subscribe for) the number of offer shares purchasable with an aggregate amount of approximately US$126.4 million at the offer price, assuming an offer price of HK$41.50. The cornerstone investors include: CNCB (Hong Kong) Investment Limited, Full Truck Alliance Group Inc., Golden Valley Value Select Master Fund, Goldshore Company Limited, Happy Wisdom Limited, PRINX CHENGSHAN (Hong Kong) Tire Co., Ltd., Mr. Yang Quanhai and Ms. Zhou Bo.