SINOIONG moves closer to market debut.
EqualOcean has learned that SINOIONG Co., Ltd. (hereinafter "SINOIONG") has successfully registered for an IPO on the Growth Enterprise Market (GEM), bringing the company one step closer to its market debut. Haitong Securities acts as its sponsor.
Established in 2018, SINOIONG is among the second batch of specialized and innovative "little giant" enterprises in China. The company focuses on the research and production of functional thin film materials, specializing in functional BOPA film, biodegradable BOPLA film, and polyamide 6 (PA6). Its products are primarily used in the fields of food and beverage, daily chemicals, pharmaceuticals, and soft-pack lithium batteries.
Notably, the company's main products are developed from in-house core technologies and have consistently formed the majority of its operating income. From 2020 to the first half of 2023, the revenue share of core technological products has consistently exceeded 98%.
In terms of performance, SINOIONG has shown steady growth in operating income, reaching CNY 16.02 billion, CNY 19.94 billion, CNY 22.97 billion, and CNY 10.85 billion in the first halves of 2020 to 2023, respectively. Meanwhile, the net profits attributable to the parent company for the same periods were CNY 2.09 billion, CNY 2.98 billion, CNY 2.85 billion, and CNY 1.17 billion.
Regarding revenue composition, the company's operating income mainly comes from the general-purpose film in the functional BOPA film, which has shown a declining trend in recent years, accounting for 88.39%, 86.74%, 81.89%, and 78.65% of revenue in the first halves of 2020 to 2023, respectively. The second-largest source is polyamide 6 (PA6), which has shown a stable increasing trend in recent years, accounting for 8.89%, 8.78%, 12.65%, and 16.14% of revenue for the same periods.
It is worth noting that SINOIONG also receives a portion of its orders from overseas. From the first halves of 2020 to 2023, the proportion of overseas orders accounted for 29.30%, 31.05%, 36.64%, and 33.91%, respectively.
In terms of clients, the top five clients of SINOIONG contribute a relatively small proportion to its total revenue, accounting for 23.74%, 23.25%, 19.40%, and 19.04% in the first halves of 2020 to 2023, respectively. Among them, Transparent Paper and Shantou Hesheng Packaging Materials Co., Ltd. are its stable top two clients, contributing 13.03%, 12.35%, 10.34%, and 9.35% to the total operating income for the same periods. In its prospectus, SINOIONG mentioned that its products have entered the supply systems of enterprises such as COFCO, CATL, BYD, and P&G.
Regarding the equity structure, the company's controlling shareholder is the founder, Yang Qingjin, a graduate of Xiamen University, directly holding 4.95% and indirectly controlling 75.45% through subsidiaries SINOIONG Group, SINOIONG Haiqing, and SINOIONG Haijie, totaling 80.4% of SINOIONG's shares.
The prospectus indicates that changes in the company's gross profit margin are primarily influenced by macroeconomic fluctuations, a slowdown in demand growth for downstream functional BOPA film, intensified industry competition leading to widespread price reductions, to which the company has also adjusted, resulting in a decrease in the gross profit margin.
SINOIONG aims to raise 2.273 billion yuan through this IPO. Apart from supplementing working capital and repaying CNY 400 million in bank loans, the remaining funds will be used for the construction of high-performance film material projects - the industrialization project of high-functional BOPA film material, the industrialization project of new biodegradable film material based on bio-based materials, and the industrialization project of high-performance polyamide materials, with proposed investments of CNY 952 million, CNY 411 million, and CNY 509 million, respectively.