MEGAP&C New Material Technology Receives Approval for IPO, Poised to Become Leading Industrial Coatings Company in China

According to the Securities and Exchange Commission's announcement on August 10th, the China Securities Regulatory Commission has approved the registration application of Shanghai-based MEGAP&C New Material Technology Co., Ltd. (hereinafter referred to as "MEGAP&C") for its initial public offering (IPO) and listing on the main board of the Shanghai Stock Exchange. If the listing on the main board of the Shanghai Stock Exchange is successful, MEGAP&C is expected to become the first A-share company in the wind power and container coatings industry and the largest industrial coatings company in terms of sales in China.

In this IPO, MEGAP&C plans to issue 27 million shares, aiming to raise approximately RMB 873 million. The funds raised will primarily be used for the construction of a new project with an annual production capacity of 70,000 tons of high-performance coatings, as well as for the development of the headquarters and research center in Jiading, intelligent warehousing construction, marketing and service network development projects, and supplementary working capital.

Since its establishment in 2002, MEGAP&C has been dedicated to the research, production, and sale of high-performance coatings across various categories. With two decades of continuous accumulation and exploration, the company has become a leading coatings supplier in the wind power blade and container industries in China and even globally. Additionally, the company's coatings products are widely applied in areas such as bridges and steel structures, and it is also expanding into other industrial coatings sectors, including wind power tower coatings, ship coatings, port equipment coatings, and energy storage equipment coatings.

With years of deep cultivation in the coatings industry, MEGAP&C has established a high-quality customer base consisting of listed companies, state-owned enterprises, and large corporations. Up to now, the company has established long-term and stable cooperative relationships with major clients, including China National Building Material Group, Sinoma International Engineering, Sinovel Wind Group, Mingyang Smart Energy, Times New Materials, E-land Technology, China Communications Construction Company, and many other wind power equipment manufacturers, as well as China International Marine Containers Group, CIMC Enric, China Huaneng Group, China COSCO Shipping, Fuhua Machinery, and Guangdong Modern Container, among other shipping container manufacturers.

Leveraging its technical expertise in wind power blade and container coatings, MEGAP&C has gradually gained market advantages, expanded its market share, and achieved a leading position in the industry. In the wind power blade coatings sector, MEGAP&C ranks 12th among Chinese industrial coatings companies and 3rd among domestic enterprises, according to the authoritative "Coatings World" rankings for 2021. Furthermore, MEGAP&C has won the championship in wind power protection coatings and wind power blade coatings in the 2022 China Coatings Industry Single Item Champion Enterprise rankings.

In the field of container coatings, MEGAP&C is one of the four major container coatings suppliers in China. According to estimates, the company has captured one-fifth of the market share in the container coatings industry in 2022, making it one of the four major container coatings suppliers in China. By leveraging its product and technological advantages, MEGAP&C continues to enhance its market position, expanding its products from dry containers to refrigerated containers, special containers, and other application scenarios. In the future, the company aims to consolidate its market position and further increase its market share.

According to the prospectus, MEGAP&C's operating revenue for the years 2020 to 2022 was RMB 941 million, RMB 1.99 billion, and RMB 1.387 billion, respectively. The net profits for the same period were RMB 176 million, RMB 326 million, and RMB 260 million, while the net profits after deducting non-recurring items were RMB 171 million, RMB 321 million, and RMB 239 million. The comprehensive gross profit margins were 39.50%, 31.53%, and 31.69%, respectively.

According to the prospectus, the wind power coatings business accounted for 55.64%, 17.20%, and 28.91% of the group's revenue in 2020, 2021, and 2022, respectively, with revenues of RMB 521.2 million, RMB 342.2 million, and RMB 400.7 million. The prospectus stated that in 2022, as the bidding volume for domestic wind power projects increased and terminal installation demand grew, the company actively explored the market, deeply tapped into customer demands, and achieved an increase in wind power coatings sales volume and average selling price, resulting in a 17.10% year-on-year growth in wind power coatings revenue.

Looking ahead, MEGAP&C will focus on three major sectors: new energy, ocean transportation, and major infrastructure projects. Based on the company's current technological advantages in wind power blade coatings and container coatings, it will continue to expand itsmarket share in these sectors. The company plans to enhance its research and development capabilities, improve production efficiency, and strengthen its marketing and service network.

In summary, MEGAP&C is a Shanghai-based company specializing in the research, production, and sale of high-performance coatings. With a strong presence in the wind power and container coatings industries, the company has established itself as a leading supplier in China and aims to further expand its market share. The IPO and listing on the main board of the Shanghai Stock Exchange will provide the company with additional funds to support its growth plans and development of new projects.