International Financing Review Asia April 4 2020 31COUNTRY REPORT CHINA› CITYCHAMP DARTONG PLANS SPIN-OFFShanghai-listed CITYCHAMP DARTONG plans
to spin off its unit Dartong (Fujian) New
Materials for a separate listing on the main
board of the Shanghai Stock Exchange.
Citychamp Dartong has three main
businesses: property development, new
energy, and enameled wires. Dartong
(Fujian) New Materials runs the wire
manufacturing business, and the parent
holds a 90.1% stake in the company.
Citychamp Dartong posted a 2019 profit
of Rmb535m, on revenue of Rmb7.79bn,
a 4% decrease year on year. The revenue
of Dartong (Fujian) New Materials also
dropped 4% year on year, to Rmb3.51bn.› CMS EXTENDS RIGHTS VALIDITYCHINA MERCHANTS SECURITIES has extended the
validity of board and shareholder approvals
for an A/H rights issue of up to Rmb15bn by
one year.
CMS first announced the rights issue
in March last year and won shareholder
approval in May.
The Chinese securities house has
extended the approval validity to May 19
2021 to ensure a smooth implementation of
the plan, according to an announcement.
The Shanghai and Hong Kong-listed
brokerage plans to sell up to 2bn rights
shares, comprising 1.7bn A-shares and
294m H-shares, on a 3-for-10 basis.
The China Securities Regulatory
Commission has approved the H-share
portion of the rights issue, but not yet the
A-share tranche.
The company will use the proceeds to
fund the capital increase of subsidiaries
and pursue its diversification strategy, for
intermediary business and investment
business, and to replenish working capital.
To comply with China’s regulations, the
A-share rights issue is non-underwritten.
The Hong Kong one is fully underwritten.
Controlling shareholder China Merchants
Finance Investment and its connected
parties have committed to fully take up
their entitlement of 44.09% of the right
issue, or 886m shares.
Citic Securities is the sponsor.› CRM FULLY EXERCISES GREENSHOECHINA RESOURCES MICROELECTRONICS has raised
an extra Rmb562m from its Star IPO after
fully exercising the greenshoe, becoming
the second issuer to apply a greenshoe on
the A-share market this year after Postal
Savings Bank of China.
The semiconductor manufacturer sold an
additional 43.9m shares at the issue price
of Rmb12.80 each, representing 15% of thebase deal of 293m shares.
In total, CRM raised Rmb4.31bn from the
float.
The shares have been trading above
the issue price since they were listed
on February 27 and touched a high of
Rmb50.99 on March 3.
Cayman Islands-domiciled CR
Microelectronics is a subsidiary of state-
owned China Resources.
CICC is the sponsor.› CSPG UNIT FILES FOR SHENZHEN IPOCHINA SOUTHERN POWER GRID ENERGY EFFICIENCY &
CLEAN ENERGY has filed to the China Securities
Regulatory Commission for a proposed
Rmb1.57bn Shenzhen IPO.
The company plans to offer up to 758m
A-shares, or 10% of its enlarged capital.
Proceeds will be used for three energy-
saving projects, and to repay bank loans.
The company was founded in December
2010 and achieved mixed-ownership last
September. It has three main businesses,
providing energy-saving services, new
energy developments such as photovoltaic
and offshore wind power, and distributed
energy.
It is owned by one of two power grid
giants, China Southern Power Grid, which
operates the electricity network in the
five southern provinces of Guangdong,
Guangxi, Yunnan, Guizhou and Hainan.
State Grid is responsible for the rest of
China’s mainland.
China Southern Power Grid and its
related parties hold a 60.8% stake in the
company.
It posted a net profit of Rmb215m on
revenue of Rmb1.08bn in Q1-Q3 2019.
China Securities is the sponsor and joint
bookrunner with GF Securities.› DUO CLEAR STAR IPO HEARINGSShanghai Star candidates FARASIS ENERGY (GAN
ZHOU) and SINOCELLTECH GROUP have cleared IPO
hearings at the Shanghai Stock Exchange to
raise a combined Rmb5.42bn.
Farasis Energy (Gan Zhou), a battery
manufacturer for new energy vehicles,
plans to raise Rmb3.44bn. It will sell up
to 314m A-shares, or 10% of its enlarged
capital. There is a 15% greenshoe.
Proceeds will be used for a lithium-ion
power battery project and to replenish
working capital.
Huatai United Securities is the sponsor, and
joint bookrunner with Citic Securities and
Soochow Securities.
Sinocelltech Group, which manufactures
recombinant proteins, monoclonal
antibodies and vaccines, plans to raise
Rmb1.98bn.It follows Suzhou Zelgen
Biopharmaceuticals and Bio-Thera Solutions
in taking advantage of listing criteria that
only require issuers to have a minimum
market capitalisation of Rmb4bn and
which do not include revenue or profit
requirements.
Listing candidates must have their
main business or products approved
by the relevant state departments,
outline accomplishments in their sector
and operate in several niche markets.
Companies in the pharmaceutical industry
must have at least one core product at the
Phase II clinical trial stage.
Sinocelltech Group’s net loss widened
to Rmb604m in Q1-Q3 2019 from a yearly
loss of Rmb459m for 2018, on revenue of
Rmb2.5m and Rmb2.9m respectively.
CICC is the sponsor.› HC SEMITEK EYES RMB1.5BN PLACEMENTChiNext-listed HC SEMITEK plans to raise
Rmb1.5bn from a proposed private A-share
placement to develop mini/micro LED and
GaN chargers.
The Wuhan-based company will sell
up to 328m shares, or 30% of the current
shares, to up to 35 investors.
The company posted a 2019 net loss of
Rmb1.05bn, after making a net profit of
Rmb244m in 2018. Its revenue in 2019 was
Rmb2.72bn, down 0.6%.› HENLIUS BIOTECH EYES A-SHARE LISTINGHong Kong-listed SHANGHAI HENLIUS BIOTECH is
seeking an A-share listing on the Shanghai
Star market to raise Rmb4bn.
The biopharmaceutical company plans to
offer 10%–20% of its enlarged capital. There
is a 15% greenshoe.
Proceeds will be used for a biosimilar
and innovative drug R&D project and a
biotech industrialization site project, and to
replenish working capital.
The company, which raised HK$3.4bn
(US$479m) from a Hong Kong IPO last
September, including a 15% greenshoe, has
not made a profit in recent years. Its net
loss widened to Rmb876m in 2019 from
Rmb505m a year earlier, on revenue of just
Rmb90.9m. However, it devoted Rmb1.4bn
to biopharmaceutical R&D last year.› HONGTA SEC EYES RMB8BN RIGHTS ISSUEShanghai-listed HONGTA SECURITIES plans to
raise Rmb8bn from a rights issue.
The brokerage plans to offer 1.09bn
shares on a 3-for-10 basis.
It will use Rmb4bn of the proceeds for
fixed income, currencies and commodities,
and the rest for capital intermediaryB&RXQWU\LQGG