Zibo, Shandong – Longhua New Material, which makes polyether polyols, obtained approval in December for listing on the Shenzhen Stock Exchange’s ChiNext board.
The company is raising CNY270m ($41.3m) in the IPO to fund a range of projects, including CNY110m for a 160kT/year ongoing expansion of polyether polyol capacity. A total of CNY30m will be spent on a new research centre, and CNY50m on building a sales network. The remaining CNY80m is working capital.
Based in Zibo, Shandong province, Longhua currently has 200kT/year polyether polyol capacity, which has been running at full utilisation, the company said.
It sold 205kT of polyether polyols in 2019, making up a 5.3% share of the Chinese market. Polymer polyols accounted for 128kT, or 23% of the segment.
Longhua has been a supplier to an array of Chinese mattress makers, as well as global footwear brands such as Nike and Adidas.
In 2019, Longhua recorded CNY2bn revenue, up 13% from 2018. Net profit jumped 76% to CNY93m. Over the first half of 2020, it had CNY790 revenue and CNY29m net profit.