7.7% Below IPO Floor Price, Global New Material's Low Offer Price Reveals Its Ambition to be Global Leader
HONG KONG, Jul 19, 2021 - (ACN Newswire) - Global New Material, a leading company in the global new consumable materials market, gave a 'big gift' to its investors before officially listing. On July 9, Global New Material (stock code: 6616) announced an IPO price of HKD3.25, 7.67% lower than the previous IPO floor price. From the investors' perspective, Global New Material lowering its IPO price from that of the IPO period, in fact, has left more room for market share price appreciation in the future.
High-quality companies prefer low-price offerings in mature capital markets
In mature capital markets, the lower-price offering is an effective strategy for information transmission. Those high-quality companies that are confident in their future business operations prefer the low-price offering strategy with higher market awareness, instead of advertising, extended lock-up period, underwriting by high-reputation investment banks or other approaches to deliver their intrinsic value to the markets.
The low-price offering is not harmful to high-quality companies as the low-price offering will attract more investors and will further lay a solid foundation for their post-listing stock price growth. Continuous growth in stock price and market value is extremely conducive to post-listing financing and therefore, will make up the value that companies give to their investors in IPO.
Besides, the low-price offering strategy is unlikely to be copied by poorer-quality companies. Since poorer-quality companies probably "usher in the peak when they go public" and then experience stock price decline, they will not and dare not purposefully lower their offering price. In fact, Global New Material lowering its IPO price is probably not only for this purpose.
Global New Material is preparing for access to Southbound Trading Link
Low-price offering activates stock trading, which probably demonstrates Global New Material's preparation for access to Southbound Trading Link. Access to Southbound Trading Link is a very essential step to enhance market attention and activate stock trading of stocks listed in Hong Kong. It is learned from the management that Global New Material, which has just completed its IPO, is currently preparing for access to Southbound Trading Link.
The inclusion of Hang Seng Indexes will affect the inclusion of the Southbound Trading Link. According to the inclusion criteria of Hang Seng Indexes, the turnover rate is also considered in addition to the examination of the companies with the top 95% of the market capitalization in the option pool. Global New Material's low-price offering strategy can facilitate faster meeting the requirements at the market dealing level.
Global New Material, which is preparing for access to Southbound Trading Link, is expected to experience stock price growth. Aftermarket close on August 20, 2021, the results of the latest mid-term review of Hang Seng Index constituent stocks will be released. As calculated by brokerage firms, the average market value threshold for entry into Hang Seng Composite Index this time is approximately HKD8.77 billion.
Global New Material currently applies an offering price of HKD3.25 with a stock market value of HKD3.779 billion, which is lower than that required for access to Southbound Trading Link. However, the company still strongly desires to make access to Southbound Trading Link, indicating that its management is confident in its future business operations and post-listing stock price performance.
Two new materials are of great potential in huge consumer markets
Both pearlescent pigments and synthetic mica, Global New Material's two main types of new material products, are of great potential in huge markets in the fields of basic necessities of life and other consumer fields.
Pearlescent pigments are penetrating high-end fields at an expedited pace while replacing traditional pigments. As shown in the prospectus, Global New Material's pearlescent pigments have two major significant advantages over traditional pigments in terms of being colour-lasting, toxic-free, harmless and environmentally friendly. In addition to traditional application fields, there is a fast-growing demand for pearlescent pigments in recent years in various high-end fields such as automobiles and cosmetics.
From 2021 to 2025, the compound annual growth rate of the global pearlescent pigment market will further climb to 23.9%, and the compound annual growth rate of pearlescent pigments in the global automotive and cosmetics sectors will surprisingly reach 47.1% and 32.8% respectively. Therefore, Global New Material's pearlescent pigment products are expected to be applied in a wider range of application fields and occupy a huge market share with tremendous potential for future growth.
Synthetic mica is also penetrating mid-to-high-end consumer markets, such as the fairly popular field of fuel cells. In view of the exhaustion of natural mica resources in China and synthetic mica products' advantages in terms of insulation, high-temperature resistance and corrosion resistance, there is an extremely strong demand for synthetic mica products and synthetic mica-based pearlescent pigments which are priced at a medium-to-high level and are mainly applied in mid-to-high-end industrial fields and other fields such as automobiles and cosmetics.
Moreover, according to scientific research findings, synthetic mica materials are being used to improve the existing fuel cell technology by virtue of their high proton conductivity and excellent heat resistance. The existing product prototype, i.e. mica membrane, is recognized as a new proton-conducting membrane with high proton conductivity.
To sum up, pearlescent pigments and synthetic mica, as two new material products, are of tremendous market potential, and Global New Material, as the leader in the fields of such two new materials, has gained dominant competitive advantages.
Comprehensive advantages cement the dominant position in the fields of the scarcest resources
In both pearlescent pigments and synthetic mica, Global New Material has built significant advantages in technology and business scale. In 2020, in terms of corporate revenue, Global New Material was the largest pearlescent pigment manufacturer in China with a market share of 11% and ranked fourth in the global market with a market share of 3%. Global New Material has sold its products to more than 30 countries and regions worldwide, and its technical team is headed by Professor Jiansheng Fu - known as the leading authority on pearlescent materials in China and father of chameleon pearlescent materials.
According to the prospectus, Global New Material is currently the only company in the field of synthetic mica that possesses all the core technologies of synthetic mica. Backed by strong R&D, Global New Material can launch over 100 new products each year, leading the global industry.
Haolu Wang, Peanutmedia
Sectors: Daily Finance
Copyright ©2024 ACN Newswire. All rights reserved. A division of Asia Corporate News Network.
More Latest Release >>
Cisco, NEC and TIM Brazil improve TIM Brazil network quality with automation and advanced data analytics to enhance business customers experience
Mar 01, 2024 22:00 JST
Honda Presents World Premiere of Production Model of "CR-V e:FCEV" at H2 & FC EXPO Tokyo
Mar 01, 2024 21:30 JST
Daimler Truck, Mitsubishi Fuso, Hino and Toyota Motor Corporation report progress on the collaboration based on the Memorandum of Understanding
Mar 01, 2024 21:30 JST
Mitsubishi Heavy Industries Invests in Fervo Energy, a US-Based Enhanced Geothermal System Startup
Mar 01, 2024 21:10 JST
JCB and Keisei Electric Railway launch Keisei Skyliner promotion for JCB cardmembers
Mar 01, 2024 14:00 JST
DOCOMO to Conduct Open RAN Field Trials with Ooredoo, Smart and StarHub
Feb 27, 2024 19:53 JST
CleverTap partners with Zoomcar to drive customer engagement on their app
Feb 27, 2024 18:00 JST
NEC Selected by NTT DOCOMO as a Virtualized Radio Access Network (vRAN) Vendor
Feb 26, 2024 17:54 JST
Fujitsu and Celonis Expand Strategic Global Partnership
Feb 26, 2024 15:40 JST
Mitsubishi Corporation's Sale of Exportadora de Sal, S.A. de C.V., a Salt Production Company in Mexico
Feb 26, 2024 14:29 JST
'MMVO,' Mazda's Production Base in Mexico Marks its 10th Anniversary
Feb 26, 2024 14:00 JST
Mitsubishi Electric Building Solutions to Supply Elevators and Escalators for New Capital Relocation Project in Indonesia
Feb 26, 2024 11:00 JST
Clear Mobitel Successfully Deploys NEC 5G SA Cloud Native Core Network to Accelerate the Adoption of Innovative 5G Solutions in the UK and the Channel Islands
Feb 22, 2024 17:13 JST
NEC UPF Achieves Industry-Leading High Performance in 5G Core Networks, reaching 1.3Tbps Throughput
Feb 22, 2024 16:10 JST
DOCOMO and NTT Expand 6G Collaborations with SK Telecom and Rohde & Schwarz
Feb 22, 2024 15:33 JST
Successful demonstration of computing and mobile networks convergence to provide diverse services in the 6G era
Feb 22, 2024 13:18 JST
Fujitsu introduces "Uvance Wayfinders", expanded and strengthened consulting capabilities to deliver cross-industry business value
Feb 22, 2024 12:05 JST
Fujitsu delivers new supercomputer system to Japan Meteorological Agency to improve prediction accuracy for typhoons and torrential rain
Feb 21, 2024 16:38 JST
MHI Group Presents "Best Innovation 2023" Awards for Activities that Contribute to Protecting the Environment
Feb 21, 2024 16:28 JST
Eisai to Boost Initiatives on Greenhouse Gas Reduction, Aiming to Achieve Net Zero by 2050
Feb 21, 2024 15:26 JST