Apple concept stock Hon Fu Han went public, raising 698 million yuan for functional electronic materials, etc.

On October 20, Shenzhen Hongfuhan Technology Co., Ltd. (hereinafter referred to as Hongfuhan) officially landed on the Growth Enterprise Market with the stock code 301086.SZ, the issue price of 96.66 yuan per share, the issue price-earnings ratio of 47.19 times, and the sponsor (lead underwriter) is CITIC Construction Investment Securities Co., Ltd.

As of press time, Hongfu Han quoted 118.60 yuan per share, an increase of 22.70%, and its total market value reached 7.116 billion yuan.

It is reported that Hong Fu Han is mainly engaged in the design, research, development, production and sales of consumer electronic functional devices and automation equipment. Among them, consumer electronic functional device products are widely used in consumer electronic products and their components such as smart phones, tablets, laptops, smart wearables, and home smart devices.

Its direct customers are mainly manufacturing service providers and component manufacturers in the consumer electronics industry chain, including Foxconn Group, Avionics Holdings, O-Film, Murata Corporation, Amphenol Group, BOE, Luxshare Group, and Innolux Group. Its functional device products are ultimately used in well-known consumer electronics terminal brands such as Apple, Microsoft, Amazon, Huawei, and Xiaomi. It has now become a qualified supplier certified by Apple and Amazon.

In terms of performance, from 2017 to the first half of 2020, benefiting from the accelerated upgrading of the consumer electronics industry, Hong Fu Han's revenue and net profit both achieved rapid growth, with revenue of 241 million yuan, 346 million yuan, 445 million yuan and 209 million yuan respectively, and the growth rates of operating income in 2018 and 2019 were 43.85% and 28.51% respectively; the corresponding net profits were 47 million yuan, 48 million yuan, 84 million yuan and 41 million yuan respectively, with growth rates of 2.72% and 76.20% in 2018 and 2019.

Plans to raise 698 million yuan for projects such as functional electronic materials

According to the prospectus, Hong Fu Han decided to apply for an initial public offering of no more than 15 million RMB common shares (A shares). After deducting the issuance expenses, the funds raised will be invested in the following projects:

The investment projects of the raised funds implemented by Hongfu Han this time are all carried out around Hongfu Han’s main business. After the implementation of the projects, the production capacity of various functional devices such as protection, conductivity, dustproof, buffering, adhesive, insulation, etc. will be added. At the same time, the industrial automation equipment production base construction project will further expand the production site and processing capacity of Hongfu Han’s automation equipment business, which will be conducive to further expanding the production scale, alleviating the current situation of Hongfu Han’s capacity utilization rate approaching saturation, and enhancing Hongfu Han’s comprehensive strength and market competitiveness. 

Specifically, the functional electronic materials and intelligent equipment project is planned to be built in Zhupingsha Village, Wangniudun Town, Dongguan City, with new production plants and auxiliary facilities, and the introduction of multiple production equipment, testing equipment and public auxiliary equipment, making full use of Hongfuhan's independently developed process technology to expand the production of functional device materials. After reaching full production, the annual output of various functional devices can be increased by about 3 billion pieces. The total investment of the project is 533.0887 million yuan, including: construction investment of 467.4871 million yuan and working capital of 65.6015 million yuan. 

Hong Fu Han stated that the "Hong Fu Han Functional Electronic Materials and Intelligent Equipment Project" funded by the raised funds is aimed at increasing the sophistication of products and improving Hong Fu Han's core competitiveness; expanding Hong Fu Han's production capacity to meet the increasing downstream demand and achieve sustainable development; at the same time, it can solve the problem of insufficient production space and improve production efficiency. 

The industrial automation equipment production base construction project is planned to be built in the Baolong New Energy Industrial Base in Longgang District, Shenzhen. It is planned to build a new production plant and auxiliary buildings for automation equipment, and purchase production, office and public auxiliary equipment. This project intends to make full use of the company's independently developed process technology to expand the production of equipment, fixtures and automatic lines in Longgang District, Shenzhen.

In the prospectus, Hongfu Han mentioned that the "Industrial Automation Equipment Production Base Construction Project" invested and constructed with the funds raised this time is aimed at improving the core competitiveness and profitability of Hongfu Han's automated production segment, increasing Hongfu Han's market share, and accelerating corporate brand promotion.

In the future, Hong Fu Han will further expand the application scenarios of its products. In terminal applications, while consolidating the mobile phone and computer businesses, it will increase the development of functional device customers in the field of smart wearable devices, and at the same time extend to potential downstream fields such as automotive electronics to broaden its product line. At the same time, Hong Fu Han will continue to increase the research and development of automation equipment, while improving its own production automation level, vigorously develop downstream customers, and strive to become an industry-leading automation solution provider.