Cngr Advanced Material Co., Ltd. initiated its global offering on November 7, with pricing expected on November 13 and trading scheduled to commence on the Hong Kong Stock Exchange on November 17. The price range for the offering is set at HKD 34.00-37.80 per share, with a base issuance of approximately 104 million shares, translating to a fundraising scale of HKD 3.54-3.94 billion. If the over-allotment option is fully exercised, the total proceeds could reach HKD 4.08-4.53 billion. Against the backdrop of a sluggish stock price, state capital divestment, and declining profits, this Hong Kong IPO appears to be a desperate capital move by the company, with retail investors potentially bearing the brunt of the risks.
After raising billions in A-shares, the company is swiftly turning to Hong Kong. However, weak stock performance and insufficient discounts have diminished the appeal of this "second-marriage stock." As a key player in China's new energy battery materials sector, Cngr Advanced Material debuted on the ChiNext board in December 2020, raising approximately CNY 1.27 billion in its initial public offering. Subsequent private placements in November 2021 and November 2022 raised CNY 5 billion and CNY 4.3 billion, respectively, bringing total fundraising to over CNY 10 billion. Despite this, its A-share price has underperformed, leaving early private placement investors with paper losses exceeding 40% (post-split adjusted). Many investors from the second private placement also exited at a loss after lock-up periods ended.
Disclosure reports show that by the end of 2024, funds from its IPO and 2021 private placement were fully utilized, while only CNY 12,100 remained from the 2022 placement—effectively exhausting CNY 10 billion in under five years. Now, the company is seeking fresh capital in Hong Kong.
The current price range represents a 29.2%-36.3% discount to its A-share closing price of CNY 48.67 on November 12. Compared to similar projects this year, Cngr's discount is slightly below reasonable levels. Recent "second-marriage stock" performances have been poor: Seres Group fell 10% on its debut and is now down 12% from its offer price; Joyson Electronics, with a comparable market cap, dropped 8% on day one and has declined nearly 21% since. Autonomous driving firms Pony.ai and WeRide also saw 10% first-day drops despite their "discount appeal."
Market participants have decoded the pricing logic: these discounts reflect valuation and liquidity gaps between markets rather than offering safety margins. Thus, such listings provide limited upside for IPO subscribers, especially leveraged retail investors. Online forums show growing skepticism toward these stocks.
Government and industrial capital dominate the cornerstone investor lineup, while foreign long-term participation remains weak. Nine cornerstone investors committed USD 210 million (46.8% of the offering), but the concentration raises concerns. Guizhou's New Industrialization Fund (USD 97.8 million) and Hunan Xingxiang Emerging Industry Fund (USD 10 million) highlight local government support, which often comes with strings attached. Five industrial partners—including Xiamen ITG and CALB—invested USD 79.7 million (17%), prioritizing business synergies over valuation. Only two financial investors participated: hedge fund North Rock (USD 15 million) and Gaoyi Capital (USD 11 million), with the former focused on short-term gains.
On the A-share front, sentiment is mixed. State-backed China Enterprise Rural Industry Investment Fund reduced its stake in Q3 2025—a negative signal—while northbound holdings remain below 2% of total shares, with no foreign institutions among major liquid holders. This lack of foreign endorsement may pressure valuations in Hong Kong's foreign-dominated market.
Profitability continues to lag revenue growth, with raw material volatility squeezing margins. Despite 2024 revenue growing 17% to CNY 40.2 billion, net profit fell 24.6% to CNY 1.47 billion—its first annual decline. The trend worsened in 2025: Q1-Q3 revenue rose just 10.4% YoY to CNY 33.3 billion, while net profit dropped 15.9% to CNY 1.11 billion.
As a battery materials firm heavily reliant on nickel and cobalt without upstream resources, Cngr faces commodity price risks. H1 2025 saw nickel-based material gross margins dip 0.6pp to 17.8%, continuing their downtrend. Cobalt-based margins rose 17pp to 25.9% due to price swings, but this segment contributes under 7% of revenue, offering minimal offset. Phosphorus-based materials have been loss-making since 2023, with H1 2025 margins at -10.5%.
Overseas expansion has also disappointed: international sales surpassed domestic for the first time (50.6% of total), but overseas margins plunged to 10.6%—2.7pp below China operations—due to high costs and weak pricing power, dragging overall profitability lower.
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