Pioneering HYC Technology Prices Its IPO at CNY 24.26 per Share
The first company to be listed on the new Shanghai Stock Exchange Sci-Tech Innovation Board announced its share opening price. The markets are almost unanimous in their praise of the Suzhou-based trail blazer.
HYC Technology (华兴源创), the pathbreaker on the new China’s sci-tech board, announced its IPO on June 25, setting the issuing price of CNY 24.26 (USD 3.54) per share. That stirred the expected first-day P/E ratio up to 41.08. On the next day, the company undertook the online road show for its investors, during which 131 questions were asked. Inquirers expressed their interest in the core technology issues and R&D-related processes management in the company. The electrical-equipment maker is going to publish the IPO results on July 3. For now, this water-testing stock offering has been reportedly oversubscribed – the first mini bubble was apparently inflated just at the step one.
Suzhou HYC Technology Co. Ltd., representing the second batch of companies to be listed on the SSE STAR Market, passed all the stages of the review process for less than three months. The firm employs the cutting-edge technologies to enrich value chains across different industries. A pure 2B company that is involved in both hardware and software development, HYC is working with businesses manufacturing LCD, flexible OLED, semiconductors, new energy vehicle electronics and other products across multiple knowledge-intensive industry verticals. The firm provides customized data-integrated software platforms for the wider gamut of downstream partners.
Suzhou-based company collected total revenue of CNY 2.89 billion (USD 418 million) during the last three years. The firm has been profitable all the way since 2016, having high margins: CNY 633.62 million (USD 91.61 million) of net profit was obtained in 2016-2018. CNY 139 million (USD 20 million) was spent on R&D in 2018, amounting to almost 19% of total cost within the same year. The latest financial records are caused by the fact that HYC is comfortable in the local industrial environment and well positioned within several essentially different value chains.
Previously, Shenwan Hongyuan (申万宏源), the financial investment management company, put the HYC’s projected P/E ratio into the range of 35-45. Accordingly, the suggested IPO share price can be found inside the area of CNY 24.00-26.00 (USD 3.51-3.80). Another locally reputable investment company – China Fortune Securities (华鑫证券) – declared for the looser range of CNY 23.35-28.01 (USD 3.41-4.10) per share. Tianfeng Securities (天风证券), the Wuhan-based securities brokerage company, said that the issuing price must be set inside the CNY 24.50-25.20 (USD 3.58-3.68) bracket.