IPO financing 0%* 15x purchasing power^

Jiangsu Lopal Tech. Co., Ltd.

World's leading manufacturer of lithium iron phosphatecathode materials

Subscription Period: 22/10/2024-25/10/2024 09:30

*Interest-free for both new and existing clients with a subscription amount of $500,000 or below;

^Applicable to PRO account clients ; Standard account clients enjoy a 12x financing ratio

Longpan Technology (02465.HK) initiated its public offering from October 22 to 25. The company aims to release 100 million H shares, with 10% allocated for public offering in Hong Kong and the remainder for international distribution. Priced between 4.5 and 7 Hong Kong dollars per share, the fundraising objective reaches up to 700 million Hong Kong dollars, with an entry fee of 3535.3 yuan per 500 shares. The anticipated listing date for Longpan Technology is October 30, accompanied by Guotai Junan International and Kaisun as co-sponsors.

Company Overview

Established in Nanjing, Jiangsu in 2003, Longpan Technology has transformed from an automotive fine chemicals entity to an international conglomerate specializing in green new energy core materials. In 2017, Longpan Technology debuted on the Shanghai Stock Exchange as an A-share listed corporation. Its operations encompass lithium iron phosphate cathode materials for lithium batteries, automotive lubricants, automotive urea, among others, securing dominant positions on a global and domestic scale within these sectors.

Longpan Technology oversees over ten intelligent manufacturing facilities globally, including a joint venture carbon lithium carbonate production base with CATL, alongside lithium iron phosphate cathode material production bases in Sichuan Suining, Hubei Xiangyang, Shandong Heze, and various other locations. The company also owns leading global automotive urea solution and alkaline electrolyzed water hydrogen production bases, as well as an integrated lubricant storage, production, and trade base in Binhai, Tianjin.

Financial Overview

According to the prospectus, Longpan Technology's operations cover two primary sectors: automotive environmental fine chemicals and lithium iron phosphate cathode materials. The latter acts as the main revenue driver, contributing 77.4% of total income in 2023, while automotive fine chemicals represent 21.8%. Recognized as the fourth-largest manufacturer globally and in China in the lithium iron phosphate cathode materials sector, the company holds a 6.5% market share, as detailed in Frost & Sullivan's 2023 report.

Financially, Longpan Technology reported total revenue exceeding 14.072 billion RMB in 2022, with a year-on-year growth of 247.15%, primarily fueled by the significant expansion in the lithium iron phosphate cathode material segment. Net profits for the fiscal years ending in 2022 and 2023, as well as the first half of 2024 until June 30, amounted to 753 million RMB, -1.233 billion RMB, and -218 million RMB, respectively, with percentage fluctuations of 114.44%, -263.81%, and 66.69%.

Approximately 40% of the net proceeds from the fundraising are earmarked for partial expenses related to Phase II of the Indonesia plant, 40% for the innovative manganese lithium iron phosphate production line in Xiangyang, Hubei, 10% for settling interest-bearing bank loans, and 10% for operational capital and general corporate objectives.

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