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Reshape Energy (02570.HK)

Subscription Period: November 28 to December 3, 09:30

Offer Price: HKD 145 to HKD 165

Entry Fee: HKD 3333.3 per lot of 20 shares

Joint Sponsors: China International Capital Corporation

Expected Listing Date: December 6

Reshape Energy (02570.HK) inaugurated its IPO proceedings from November 28th to December 3rd, with a vision to globally proffer 4.827 million H shares, allocating 10% for public subscription within Hong Kong and 90% for international allocation. Tagged at HKD145 to HKD 165 per share, organized in bundles of 20 shares, the entry fee per bundle hovers around HKD 3,333.3, with an upper limit fundraising target of HKD 797 million. The listing debut of Reshape Energy is anticipated on December 6th, with China International Capital Corporation serving as the exclusive sponsor.

Corporate Overview

Reshape Energy stands as a trailblazer in China's realm of hydrogen fuel cell technology, specializing in the intricate domains of designing, developing, fabricating, and vending hydrogen fuel cell systems, alongside hydrogen-centric equipment and ancillary components, complemented by the provision of hydrogen fuel cell engineering services. As the pioneering entity in China to autonomously investigate and fabricate fuel cell stacks, membrane electrodes, and bipolar plates, Reshape Energy further distinguishes itself as the foremost player in the hydrogen fuel cell industry encompassing both PEM and ALK electrolysis hydrogen production apparatus. Its suite of offerings traverses the entire hydrogen industry spectrum from production to application, fostering a harmonious utilization of electricity, hydrogen, and electricity.

Based on the latest market intelligence derived from the 2023 sales figures of hydrogen fuel cell systems, Reshape Energy commands a commanding 23.8% market share in China's hydrogen fuel cell system domain, securing the paramount position. Within the realm of heavy-duty vehicles outfitted with hydrogen fuel cell systems, the company's market presence attains a notable 42.4%. By May 31, 2024, Reshape Energy's hydrogen fuel cell systems have energized over 5,900 fuel cell vehicles across China.

Financial Position

Per the financial documentation of Reshape Energy, the company recorded revenues approximating RMB 524 million, RMB 605 million, RMB 895 million, and RMB 12.521 million for the five-month intervals concluding on May 31 in the years 2021, 2022, 2023, and 2024, respectively. Concurrently, the company incurred losses in the vicinity of RMB 654 million, RMB 546 million, RMB 578 million, and RMB 409 million during the same periods.

Over the preceding three years, Reshape Energy has sustained adverse operating cash flows. Elucidating on this aspect, the Chief Financial Officer, Shao Liangming, expounded that the hydrogen energy sector remains nascent, necessitating sustained investments in research and development. During the aforementioned triennium, annual R&D outlays surpassed RMB 200 million, representing a substantial 30% of total expenditure. Simultaneously, the regulatory subsidy frameworks governing fuel cell vehicles impede the company's accounts receivable retrieval period.

Nonetheless, the evolving order architecture has led to a gradual surge in non-subsidized orders, thereby diminishing collection durations and enhancing cash flow metrics.

The proceeds derived from Reshape Energy's IPO drive will predominantly be apportioned as follows: 74.5% designated for hydrogen fuel cell system R&D endeavors and expansion initiatives; 15.3% earmarked for hydrogen equipment expansion projects; 7.7% allocated for the development of overseas market ventures; and 2.5% allocated for operational funds and general corporate objectives.

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