Chinese Aircraft Equipment Maker Jianghang Eyes $148m In STAR IPO

Chinese manufacturer of aircraft devices Hefei Jianghang Aircraft Equipment Co., Ltd is targeting to raise 1.04 billion yuan ($148 million) in an initial public offering (IPO) on the Nasdaq-style STAR Market of the Shanghai Stock Exchange (SSE), according to a company filing.

Jianghang, which kicked off its online roadshow on July 22, has sold 101 million common shares at a price of 10.27 yuan ($1.5) apiece. 

After the IPO, Jianghang plans to invest the proceeds towards scientific research, system development, capacity expansion and working capital. 

State-owned CITIC Securities and Avic Securities are acting as the joint principal underwriters for the deal. The company will float the shares under the symbol “688586”.

Located in East China’s Anhui province, Jianghang produces advanced equipment to serve the aviation industry. Its pipeline of products consists of oxygen system, airborne tank inertia protection system, reserve tank, refrigeration equipment, among others. 

It primarily derives its revenue from the top five clients who account for 78 per cent of annual earnings.

Its prospectus shows that annual revenues for the past three years stood at 674 million yuan ($96 million) in 2019, 661 million yuan ($94 million) in 2018 and 679 million yuan ($97 million) in 2017. As of December 2019, it registered 113 million yuan ($16 million) in net profit. 

Aviation Industry Corporation’s subsidiary Zhonghang Jizai will remain as the largest shareholder in Jianghang holding with 41.02 per cent stake while AVIC Capital will be the second-largest shareholder with 14.17 per cent stake, down by 4.72 per cent. 

Its other shareholders include China Reform Holdings Corporation’s investment vehicle China Reform Financial Network (6.16%) and state-owned Jiangxi Military Industry Holding (4.38%). 

AVIC Capital, China Reform Financial Network, Beijing Haolan Xingyuan Investment and North Industries Group Investment Management had together made a strategic investment in Jianghang back in 2018. Subsequently, in 2019, China Zhongji Investment had infused an undisclosed Series B round funding in Jianghang.