Chinas Science Service Provider Titan Scientific Refiles For STAR Market IPO To Raise $76m

Chinese science equipment and service provider Shanghai Titan Scientific has refiled for an initial public offering (IPO) on China’s Nasdaq-style STAR Market to raise 535 million yuan ($76 million), roughly six months after the firm’s first attempt was rejected by the regulator.

The STAR Market of the Shanghai Stock Exchange (SSE) accepted the new IPO application on April 13. According to the application, Titan Scientific enlarged its fundraising target this time from the previously envisaged offering size of 415 million yuan ($59 million).

This is the first case for the Chinese new sci-tech board to accept a company’s listing application for the second time. A firm is allowed to apply again for a public offering of shares six months after the former application is denied, according to the bourse’ rules.

The development comes after Titan Scientific’s first IPO attempt was dismissed by the China Securities Regulatory Commission (CSRC), the main regulator of China’s securities industry, on September 26, 2019 because the company failed to illustrate its own core technology or whether the business depended chiefly on such technology.

The regulator disclosed that Titan Scientific’s main revenues were from either selling products made by third-party brands, or outsourcing to original equipment manufacturers (OEMs). These activities could not convince the board what Titan Scientific defined itself as a firm with “self-developed core technology.”

Proceeds from the IPO will be used for the upgrade of its online platform and the construction of a technological R&D centre. Titan Scientific will also increase investment to build its sales and logistics network.

Titan Scientific, founded in October 2007, operates as a one-stop provider of scientific supplies, laboratory equipment, and compatible services to clients in the fields of biopharmaceutical, new materials, new energy, as well as medical analysis and detection.

Shanghai-based Titan Scientific primarily develops and manufactures scientific reagents, including high-end reagents, general reagents, and analytical reagents, among others.

The company registered a revenue of 1.14 billion yuan ($162 million) in 2019, up 23.54 per cent year-on-year, while the net profit also grew 23.68 per cent to 74 million yuan ($10 million), according to its prospectus.

Previously, the company collected 130 million yuan ($18 million) in a strategic investment from Eastern Bell Capital in October 2019. The Shanghai-based supply chain investment fund now holds a 5.41 per cent stake in the firm.

Chinese investment firm Tronfund is the second-largest shareholder with an 8.57 per cent stake. Domestic investors Shanghai Ruihe Xinxin Venture Capital, and Guokai Technology Venture Investment own 3.69 per cent and 3.13 per cent shares in Titan Scientific, respectively.