This year, the Hong Kong IPO market has remained highly active. Driven by policy tailwinds and improved liquidity, the city hosted 80 IPOs in the first 10 months, raising over $26 billion, securing its position as the global leader in IPO fundraising. On November 24, CHUANGXIN IND (02788) officially debuted on the Hong Kong Stock Exchange, with an issue price of HK$10.99 per share and a maximum fundraising target of approximately HK$5.5 billion. The company attracted 17 cornerstone investors, including Hillhouse Capital, China Hongqiao, Taikang Life Insurance, Greenwoods, ORIX, China Pacific Insurance, GF Fund, and Fullgoal Fund, with a combined subscription of around $351 million, reflecting strong institutional confidence in its fundamentals.
Brokerage data shows that CHUANGXIN IND garnered overwhelming demand during its public offering phase, with its international placement oversubscribed by more than 40 times. Over 300 global top-tier institutions, including sovereign wealth funds, leading international long-term investors, and influential Chinese funds, participated. The Hong Kong public offering was oversubscribed nearly 450 times, marking it as one of the year's hottest IPOs with exceptional market enthusiasm. Based on the current fundraising scale, CHUANGXIN IND is poised to rank among the top 10 IPOs this year and could secure a top-three spot excluding A+H listings.
The company’s gray market performance was equally impressive, with significant gains on Phillip Securities and Futu platforms. Phillip’s gray market closed up 30.57% at HK$14.35, while Futu rose 26.02% to HK$13.85. Historically, the average gray market and first-day gains for Hong Kong-listed IPOs in the first half of the year were 15.9% and 13.3%, respectively. Given CHUANGXIN IND’s robust gray market rally, its debut is expected to deliver strong returns.
From a fundamental perspective, CHUANGXIN IND has demonstrated stellar performance. Between 2022 and 2024, its revenue grew steadily, while net profit surged from RMB 913 million to RMB 2.63 billion, achieving a compound annual growth rate exceeding 60%. The company’s integrated supply chain, cost efficiency, and potential contributions from its Saudi project further bolster its long-term growth prospects.
**Dual Growth Drivers: Organic and Expansion** CHUANGXIN IND’s investment appeal lies in its strong organic moat. The company has built a seamless "energy-alumina refining-electrolytic aluminum smelting" ecosystem, ensuring high self-sufficiency in key raw materials and energy. This integrated model enhances profitability resilience amid industry fluctuations.
From 2022 to the first five months of 2025, revenue from alumina and related products rose from 2.0% to 21.1% of total sales, with alumina self-sufficiency reaching 84% in 2024. This diversification mitigates external price volatility, converting it into internal cost advantages. In energy self-sufficiency, the company’s Inner Mongolia facility operates captive coal-fired power plants, achieving 88% electricity self-sufficiency in 2024—far above the industry average of 57% cited by CRU.
CHUANGXIN IND’s cash cost per ton of aluminum stood at RMB 15,112 in 2024, significantly below China’s average of RMB 17,700 per ton, ranking it among the top 5% of domestic producers and top 30% globally. Its cost discipline drove the sales-cost-to-revenue ratio down from 84.9% in 2022 to 71.8% in 2024, while financial expenses fell 28.4% YoY in early 2025, underscoring its financial health.
For expansion, CHUANGXIN IND is capitalizing on the Belt and Road Initiative with a forward-looking 500,000-ton electrolytic aluminum project in Saudi Arabia. CRU forecasts Middle East aluminum demand to grow at a 4.6% CAGR from 2025 to 2028. This venture not only taps into regional growth but also diversifies geopolitical and market risks. Saudi Arabia’s abundant oil and gas resources provide stable, low-cost electricity—industrial power costs there are substantially lower than off-peak rates in China—enhancing the project’s energy cost edge.
In summary, CHUANGXIN IND stands out as a rare blend of stability and growth. Its integrated operations and cost leadership ensure a solid foundation, while overseas expansion unlocks a clear second growth curve. As global electrolytic aluminum demand remains robust, the company emerges as a compelling long-term investment opportunity.
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