China IPO Digest: Shanghai CEO, GenTech Raise Funds Ahead Of STAR Market Offering

The environmental protection equipment manufacturer Shanghai CEO Environmental Protection Technology and process critical system solution provider Shanghai GenTech have announced updates of their initial public offerings (IPOs) on STAR Market.

SDIC-backed CEO secures $121m ahead of STAR Market IPO

Shanghai CEO Environmental Protection Technology Co., Ltd, a manufacturer of environmental protection equipment, has raised 841 million yuan ($121 million) from a subscription exercise ahead of its initial public offering (IPO) on Shanghai’s Nasdaq-style STAR Market, according to a company filing on August 11.

CEO offered 18.20 million common shares at a price of 46.22 yuan ($6.67) apiece including 865,426 for strategic placement, 6.92 million shares for an online subscription, and 10.41 million shares for offline exercise. CEO will float its shares under the symbol “688335” when it lists on August 17.

With the proceeds, the company plans to spruce up its manufacturing capacity, develop environmental technology and research, and fuel working capital. Haitong Securities is the lead underwriter for the deal.

CEO, which started operations in 2011 in Shanghai, offers many environmental protection devices. Its flagship pipeline products comprise sludge dewatering and drying, and exhaust gas purification, which are widely used in the field of sewage disposal.

The company is backed by China’s state-owned SDIC Venture Capital. In August 2019, SDIC and Chinese asset management firm CDH Investments collectively made a strategic investment of 60 million yuan ($8.6 million) in CEO. After the IPO, SDIC will still have a 4.41 per cent stake, down 1.47 per cent. CDH will also retain its 2.64 per cent equity interest.

The IPO prospectus shows that CEO’s top five clients in 2019 were the state-owned players Shanghai Chengtou Water Group, Shanghai Construction Group, Shanghai Urban Construction Design & Research Institute, China Ctexic Corporation, and SAIC Motor.

CEO booked general revenue of 343 million yuan ($49.51 million) in 2019, a jump of 155 million yuan ($22.21 million) from 2018. Its net profit stood at 64.15 million yuan ($9.25 million), up 31 million yuan ($4.48 million) from with the previous year.

GenTech raises $145m

Shanghai GenTech Co., Ltd, a provider of process critical system solutions, has raised 1.007 billion yuan ($145 million) through a subscription exercise ahead of its IPO on the Nasdaq-style STAR Market of the Shanghai Stock Exchange, according to a company filing on Friday.

Shanghai GenTech, which kicked off the subscription on August 10, offered 63.24 million common shares at a price of 15.67 yuan ($2.3). Guotai Junan Securities is the principal underwriter for the IPO. GenTech will float the shares under the symbol “688596”.

Since its inception in 2009, GenTech has developed integrated process materials and equipment such as electronics specialty materials, and clean fluid systems. The company primarily caters to industries like semiconductors, flat panel display, fiber optics, and bio-pharmaceutics.

Its annual revenues stood at 1.19 billion yuan ($171 million) in 2019, 921 million ($133 million) in 2018, and 707 million ($102 million) in 2017. Shanghai GenTech aims to use the proceeds for equipment innovation and laboratory, as well as to complement operating funds.

GenTech is backed by GF Securities, JZ Securities, Zhonghe Capital, Langcheng Capital, and Tongxi Capital.