[New Stock IPO] Guanghe Technology 1989 IPO raises up to 3.3 billion, mainland PCB leader, over 55.7 billion in margin financing, oversubscribed 167 times, entry fee 7,261 yuan, what is the A-share valuation level?

Guanghe Technology (New Listing Number: 01989) Initial Public Offering from March 12 to 17. The PCB manufacturer Guanghe Technology, listed on the Shenzhen Stock Exchange, plans to issue 46 million H-shares, with 10% available for public sale in Hong Kong. The maximum offering price is HKD 71.88, aiming to raise up to HKD 3.31 billion. As of noon on March 16, Guanghe Technology received HKD 55.78 billion in margin subscriptions, with a public offering subscription of HKD 330 million, resulting in an oversubscription of 167.7 times.

Guanghe Technology offers 100 shares per lot, with an entry fee of HKD 7,260.50 per lot. The H-shares will be listed on March 20, with CITIC Securities and HSBC serving as joint sponsors.

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Guanghe Technology A-shares Price Level

Before the IPO, Guanghe Technology A-shares (Shenzhen: 001389) closed at RMB 124.1 (approximately HKD 141.42) on Wednesday (11th), representing a 49.2% discount compared to the H-shares’ maximum offering price of HKD 71.88, which is equivalent to a 96.7% premium over the A-shares.

As Guanghe Technology A-shares have recently declined, the premium has narrowed.

Business and Performance

Guanghe Technology mainly engages in R&D, manufacturing, and sales of customized printed circuit boards (PCBs) used in computing servers and other high-performance scenarios. According to Frost & Sullivan, based on the cumulative revenue from server PCBs from 2022 to 2024, it ranks third globally among server PCB manufacturers and first in Mainland China.

High-performance servers undertake core computing tasks, designed for compute-intensive workloads. Their main function is to efficiently process large-scale data, complex algorithms, and compute-heavy operations. PCBs are core components in electronics manufacturing, providing physical mounting platforms for components, with conductive traces and pads enabling mechanical fixation and electrical connections between components.

Guanghe Technology supplies PCBs for computing scenarios, industrial scenarios, and consumer scenarios. In the first nine months of last year, revenue reached RMB 3.84 billion, up 43.1% year-over-year, with a profit of RMB 720 million, up 47%.

12 Cornerstone Investors Subscribed for USD 190 Million

Guanghe Technology attracted 12 cornerstone investors, subscribing a total of USD 190 million, including CPE, Yuanfeng Asset Management, Guotai Junan Investment (related to Yuanfeng’s off-market swaps), Shanghai Jinglin, CITIC Securities International Capital Management (related to CITIC Securities’ back-to-back total return swaps and client total return swaps), Hong Kong Jinglin, UBS Asset Management Singapore, Harvest Global Investments, Eastspring, GBAHIL, MY Asian, Baring, Taixin Life, and ICBC Wealth Management.

Use of Net Proceeds:

• 19.7%: For Phase II of the Thailand base
• 52.1%: For expanding and upgrading manufacturing facilities at the Guangzhou base
• 10%: To enhance R&D capabilities in developing materials, improving production processes, and product development
• 8.2%: To seek strategic partnerships, investments, or acquisitions that complement the business and align with development strategies
• 10%: For operating capital and general corporate purposes

Source: Guanghe Technology Announcement