China's chemical materials supplier GON TECHNOLOGY (02768) concluded its public offering, which ran from January 27 to January 30. Market information indicates the company secured HK$110.76 billion in margin financing from brokers. Based on its public offering size of HK$126 million, the offering was oversubscribed by 878 times.
GON TECHNOLOGY plans to issue 30 million H shares, with the Hong Kong public offering comprising 10% and the international offering 90% of the total, plus a 15% over-allotment option. The offer price is set between HK$34.00 and HK$42.00 per share, with a board lot of 200 shares, requiring a minimum entry cost of HK$8,484.7 per lot. The total maximum proceeds raised could reach HK$1.26 billion. The company is expected to begin trading on February 4, with China Merchants Securities International acting as the sole sponsor.
For this offering, GON TECHNOLOGY has secured eight cornerstone investors: Li Guan, SLD International, Cheng'an International, Shenwan Hongyuan Securities, First Seafront Fund Series SPC, Xinjia Wealth, Luminous Horizon, and Fullgoal Hong Kong. Their aggregate investment amounts to approximately HK$320 million.
According to its prospectus, GON TECHNOLOGY was founded in 2000 and is a Chinese supplier specializing in new chemical materials and upstream/downstream products like gelatin and collagen. The company serves the chemical industry and the health and wellness sector, primarily engaging in the R&D, production, and sales of products for industrial and commercial use. It completed its shareholding reform in 2011, and its A-shares (GON Technology, 002768.SZ) were listed on the Shenzhen Stock Exchange in June 2015.
The company's clientele includes manufacturers from downstream industries such as automotive, new energy, and home appliances, as well as supply chain solution providers for these manufacturers. For its health and wellness segment, customers are mainly medical and pharmaceutical manufacturers who use its products as raw materials for producing downstream items like supplements and medicines.
Data from Frost & Sullivan shows that, based on 2024 production volume in China's bone gelatin industry, GON TECHNOLOGY is the second-largest producer in the Chinese market and the largest domestic brand by output. In the hollow capsule industry in China for 2024, it ranks as the second-largest domestic brand producer by related output.
Financially, for the fiscal years 2022, 2023, 2024, and the first ten months of fiscal 2025, the company reported revenues of approximately RMB 13.406 billion, RMB 17.439 billion, RMB 19.188 billion, and RMB 17.444 billion, respectively. Profits for the same periods were RMB 724 million, RMB 540 million, RMB 721 million, and RMB 721 million.
The net proceeds to be received by the company are estimated to be approximately HK$1.058 billion, assuming an offer price of HK$38.00 per H-share (the midpoint of the indicative price range). About 50.0% will be allocated to expanding production capacity at its new production base in Thailand; approximately 35.0% will be used to expand capacity at its new production base in China; around 10.0% is earmarked for investments in Hong Kong, including establishing a regional headquarters and upgrading production facilities; and the remaining 5.0% of net proceeds will serve as working capital and for general corporate purposes.
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