Chinese auto parts provider Jiangsu Rongtai Industry released a statement on February 22, announcing that the company is going to list on the Main Board of the Shanghai Stock Exchange (SSE) under the ticker “605133” on February 24, with Orient Securities [600958:CH] as the principal sponsor, as reported by Eastmoney on the same day. The company will raise RMB813.6m by issuing 40m new A-shares in the purposed IPO at a price of RMB20.34 per share, accounting for 25% of the total equity after the issuance.
Established in 2000, Jiangsu Rongtai Industry focuses on developing, producing, and selling precision aluminum alloy die-casting products, such as automotive steering systems, transmission systems, and brake systems. The revenue contribution from its auto parts, vehicle modules, and motorcycle parts reached 89.11%, 9.46%, and 1.44% of the total 1H20 revenues, respectively. Besides, Rongtai mainly provides its products to Robert Bosch GmbH and ThyssenKrupp [TKA:GR], which contributed to 54.60% and 36.43% of the total revenues in 1H20. According to the prospectus, the company will use 75% of the net proceeds from the IPO to expand its production capabilities of automotive powertrain housing, automotive steering systems and auto lightweight aluminum alloy parts, 4% for the establishment of its R&D center, and the rest for working capital replenishment. As for the performance, Rongtai achieved operating revenues and net profit attributable to shareholders of RMB990.87m and RMB158.30m in 2019, up 12.58% YoY and 36.55% YoY, with a 2017-2019 CAGR of 20.51% and 29.89%, respectively. Besides, the company expected its 2020 operating revenues and net profit attributable to shareholders would decrease by 1% YoY and 9% YoY to RMB980.96m and RMB128.82m.