Changjiu Holdings Limited on its IPO process with Patrons as Joint Bookrunners and Joint Lead Managers

Changjiu Holdings Limited ("Changjiu Holdings"), stock code (06959.HK), commenced its IPO from 29 December to 3 January, with Patrons as Joint Bookrunner and Joint Lead Manager. It is learnt that the Group intends to issue about 50.54 million shares in this IPO project, of which 10% will be offered in Hong Kong and 90% will be placed internationally. The offer price ranges from HK$5.90 to HK$7.90 per share, with a board lot of 500 shares and an admission fee of about HKD3,989.84. The IPO is expected to be officially listed on 9 January. Changjiu Holdings will allocate the proceeds of the fund raising to improve the monitoring services for pledged vehicles, develop an integrated support system for the automobile distribution sector, and expand the operation and management capabilities of automobile dealerships, a portion of which will be used to expand the operation of sales and marketing capabilities.

According to the offering prospectus, Changjiu Holdings is a subsidiary of the Changjiu Group, which is the largest vehicle monitoring service provider for automobile pledges and provides automobile dealership operation management services in China. According to China Insights Consultancy, with a market share of 47.9% based on revenues in 2022 and the number of automobile dealers' accounts as at 31 December 2022, Changjiu has gained a dominanting position among the industry in the pledged vehicle monitoring services market. As at 30 June 2023, the Group had provided PMS services to approximately 200 branches of 18 commercial banks (including all the "Big Six" state-owned commercial banks and 12 joint-stock commercial banks in the PRC), 27 automobile finance companies and 11,152 automobile dealers.

In terms of performance, Changjiu Holdings has achieved sustained high revenue growth from 2020 to 2022. Revenue increased from RMB 431 million to RMB 548 million, representing a compound annual growth rate of 12.8%. Overall gross profit margin also improved, from 38.2% in 2021 to 41.1% in 2022. In the first half of this year, the Group achieved revenue of RMB309 million and net profit of RMB 35,291,000, with a gross profit margin of 43.1%. These figures show that Changjiu has achieved steady growth in its performance and has also done well in terms of profit. This reflects the company's increasing competitiveness and operational efficiency in the market, bringing stable returns to investors.

By acting as the Joint Bookrunner and Joint Lead Manager of the IPO project, Patrons has leveraged on its abundant resources and business strengths to provide the necessary assistance to the listing of Changjiu Holdings, with a view to achieving business growth and market expansion. According to the market trend, the rise of new energy vehicle brands in China will bring a new boom to the automobile industry and create opportunities for positive market growth.