According to the disclosure of the Hong Kong Stock Exchange on December 28, Anhui Conch Material Technology Co., Ltd. (Hereinafter referred to as "Conch Material Technology") submitted its listing application to the main board of the Hong Kong Stock Exchange, with CITIC Construction Investment International as its sole sponsor.
According to the prospectus, Conch Material Technology is the only supplier of new fine chemical materials in the world covering the whole industry chain of cement admixtures and concrete admixtures, integrating R & D, production, sales and technical support. During the Track Record Period, the Company mainly sold cement admixtures and concrete admixtures and their related process intermediates, namely alkanolamine products, polyether monomers and polycarboxylic acid mother liquor, in the PRC. The prospectus shows that Conch Branch is the largest shareholder of Conch Material Science and Technology, holding 48.62% of the shares, while Conch Branch is controlled by Anhui Conch Group. In terms of
production capacity, as at the Latest Practicable Date (19 December 2023), Conch MaterialScience has ten production plants across the PRC for the production of cement and concrete admixtures and their related process intermediates. As at the Latest Practicable Date, the Company has 20, 22, 16, 5 and 45 production lines for the production of cement admixture, concrete admixture, alcohol amine products, polyether monomer and polycarboxylic acid mother liquor, respectively.
On the competitive landscape, the global cement admixture market is highly concentrated, according to Frost & Sullivan. As of December 31, 2022, the top five global suppliers of cement grinding AIDS (i.e., the main types of cement admixtures) accounted for approximately 50.0% of the total global production of cement grinding AIDS, while the top five Chinese suppliers of cement grinding AIDS accounted for approximately 45.8% of the total production of cement grinding AIDS in China. According to Frost & Sullivan, there are many participants in the concrete admixture market. There are about 4,000 concrete admixture suppliers in China, and the market is relatively dispersed. In recent years, the market share of high performance concrete water reducing agent has been increasing because of its satisfactory performance. In the future, the market share of high performance concrete water reducer is expected to increase further.
According to Frost & Sullivan, Conch Material Technology ranked first in China and second in the world in terms of the production of cement grinding AIDS (the main type of cement admixtures) in fiscal year 2022, with market shares of 31.3% and 16.0%, respectively. At the same time, according to the output of alcohol amine products (raw materials for cement admixtures) in fiscal year 2022, the company ranked first in China, with a market share of 29.0%. In addition, according to the production capacity of high performance concrete water reducer (the main type of concrete admixture) in fiscal year 2022, it ranked seventh in China, with a market share of 2.3%. According to the output of polyether monomer (raw material of concrete admixture) in fiscal year 2022, it ranked sixth in China, with a market share of 3.4%.
Financially, in fiscal year 2020, fiscal year 2021, fiscal year 2022 and the six months of 2023, Conch Material Technology realized revenue of about 1.302 billion yuan, 1.538 billion yuan, 1.840 billion yuan and 1.036 billion yuan, respectively. During the same period, the profit for the year was approximately RMB142 million, RMB127 million, RMB92.4 million and RMB47.7 million, respectively.
As stated in the prospectus of Conch Materials Technology, during the Track Record Period, Conch Cement Group was the largest customer of the Company during each year/period and, as at the Latest Practicable Date, approximately 36.4% of its equity interest was held by Conch Cement Group, one of the controlling shareholders of the Company. Since the second half of 2018, the company has been a supplier of admixture products for Conch Cement Group. Given the extensive connections between Conch Cement Group and the Company, the business operations of Conch Material Technology are directly affected by the business operations, operating results and prospects of Conch Cement Group. In addition, the Company may be materially affected by any material change in the arrangements between members of the Conch Cement Group and the Company.
