Fangbang’s Another IPO Shot Aims at STAR, after being Rejected by GEM
Backed by Xiaomi and state-owned fund, the EMI maker Fangbang is back on the public capital market. It was trapped by competitor TATSUTA last year but luckily it won the ticket heading towards the new era, STAR Market.
Fangbang Electronics is going to list on STAR Market next Monday after it was rejected by China’s Shenzhen Stock Exchange Growth Enterprise Market (GEM) last April.
Founded in 2010, the Guangzhou-based company operates in the Bare Printed Circuit Board Manufacturing industry. It relies heavily on its core business that represents more than 98% of its revenue for the past three years, Electromagnetic Interference (EMI) shielding film.
The material, now widely used in Flexible printed circuit (FPC) products and thus consumer electronics like smartphone and tablet PC, was manufactured by Japanese firm TATSUTA Electric Wire & Cable in 2000. Fangbang made its proprietary EMI in 2012, breaking away from the difficult situation for China that the technology has been controlled by overseas players such as inventor TATSUTA and Toyochem. Now the EMI manufacturer has a market share of 33.42% in China’s EMI industry and 19.60% globally, according to its prospectus. Though it enjoys a fair market position, the firm insists on low price strategy. Volatile raw material price impacted on its gross profit in the reported period, which incurred the Shanghai Stock Exchange’s questions during the IPO.
The firm’s last-time failure in applying for SSE GEM listing is correlated with TATSUTA, analysts said. Jan 2017, TATSUTA filed a lawsuit with Guangzhou Intellectual Property Court against Fang Bang for infringement of its patent right regarding EMI. The Court rejected the appeal for three times and the final dismissal happened last December. During the back-and-forth, Fang Bang lost the opportunity for GEM.
Fangbang introduced Xiaomi and Government-backed fund into its shareholder list after that. Xiaomi fund has 3.33% share in the company now while Passion Capital’s affiliated fund Huang Pu Passion Fund (黄埔斐君) has 2%. Interestingly, Passion Capital is also an investor of another STAR debutante TZTEK (天准科技).
From the latest financial highlights, the company reported a net sales revenue of CNY 274.71 million (USD 39.94 million) with an increase of 21.41% (year-on-year) in 2018. The net profit of Fang Bang increased by 22.66% in 2018.