Chinese Automation Company Supcon Raises $267m Ahead Of STAR Market IPO

Chinese automation and information technology player Zhejiang Supcon Technology Co., Ltd has raised as much as 1.76 billion yuan ($267 million) ahead of an initial public offering (IPO) on China’s Nasdaq-style STAR Market.

The company, which filed its IPO prospectus on Tuesday, has sold 49.13 million common shares at 35.73 yuan ($5.4) apiece to its IPO subscribers before the listing, per a company filing with the Shanghai Stock Exchange.

With the IPO proceeds, Supcon will aim to facilitate a range of projects including smart industrial software, pressure transmitter, intelligent control valve, automation platform, and technology innovation. It will also designate a part of the proceeds for working capital.

Chinese Shenwan Hongyuan Group’s subsidiary Shenwan Hongyuan Financing Services is the principal underwriter for the deal, while CITIC Securities serves as the joint underwriter. Supcon is expected to float shares under the symbol “688777”.

Since its inception in 1999, Supcon has been engaged in the R&D of automation products including its process automation solution Supcon InPlant, controllers, isolators, transmitters, and enterprise resource planning systems. The products primarily cater to industries such as nuclear, oil and gas, metallurgy, petrochemical and refinery, chemical, and power.

Headquartered in East China’s Hangzhou province, Supcon has set up support divisions in 30 regions in the country and it has extended to Southeast Asia, the Middle East, and others. Its products are exported to over 30 foreign countries, it claims.

Supcon registered 2.06 billion yuan ($314 million) in sales earnings as of September this year, a 22.54 per cent year-on-year growth. Meanwhile, it also clocked a net profit of 242 million yuan ($37 million), up 10.98 per cent from a year earlier. 

Founder Jian Zhu will remain the largest shareholder in Supcon after the IPO, even after bringing down its direct stake from 16.37 per cent to  14.73 per cent. Hangzhou Yuancheng Management and CHNT, a smart energy solution provider, will remain the second and third largest shareholders holding 8.04 per cent and 7.43 per cent stakes, respectively. 

Its majority shareholders comprise state-owned Sinopec Capital (4.46%), Intel (4.45%), China National Nuclear’s investment arm CNNC Industry Fund Management Corporation (2.70%), and Lenovo Holdings (0.53%). 

Sinopec Capital had exclusively made an undisclosed strategic investment in Supcon in September 2019. Prior to that, Wanxiang Group along with Loyal Valley Capital and Hangzhou Puyang Investment Management had together invested in Supcon in January last year.