New Stock News | Red Avenue New Materials Group (603650.SH) submits a secondary application to the Hong Kong Stock Exchange, ranking first in sales revenue in both the global and Chinese markets for phenolic resin rubber additives used in tires.

According to the Hong Kong Stock Exchange's disclosure on August 21, Red Avenue New Materials Group Co., Ltd. (Stock code: 603650.SH) has submitted its listing application to the Hong Kong Stock Exchanges main board, with Guotai Haitong/HAITONG INT'L acting as the exclusive sponsor. The company had previously submitted a listing application to the Hong Kong Stock Exchange on February 8. Company Overview According to the prospectus, Red Avenue New Materials Group is a comprehensive new materials service provider in China, focusing on advanced chemical products. The company is primarily engaged in the research and development, production, marketing, sales, and distribution of new chemical materials (referring to materials developed or improved from traditional materials with superior performance or specific functional characteristics). During the track record period, Red Avenue New Materials Groups main business includes three divisions: (i) rubber additives for tires and other chemical products; (ii) electronic materials; and (iii) fully biodegradable materials. In the rubber additives for tires and other chemical products division, according to the Frost & Sullivan report, Red Avenue New Materials Group ranked first in both the global and China markets for phenolic resin rubber additives with sales of 4.14 billion RMB and 4.59 billion RMB in fiscal year 2025, achieving market shares of 41.4% and 45.9%, respectively. In the area of electronic materials, Red Avenue New Materials Group ranks first among domestic suppliers in China for the sales of semiconductor photoresists and TFT array photoresists in fiscal year 2025, with market shares of 5.8% and 26.2%, respectively. In the rubber additives for tires and other chemical products division, Red Avenue New Materials Group's main product categories include rubber resins and additives, such as phenolic resin, PTBP, and other chemical products. These products are primarily used in the production of automotive tires and other rubber products to optimize various performance characteristics of rubber, such as viscosity, strength, and safety. The product supply in the electronic materials division is mainly divided into (i) semiconductor materials, including semiconductor photoresists, CMP polishing pads, high-purity solvents, and EBR; and (ii) display panel materials, including display panel photoresists, organic insulating films, and luminescent materials. Red Avenue New Materials Group's electronic materials are mainly used by downstream customers for the production of semiconductors and display panels. In terms of the fully biodegradable materials division, Red Avenue New Materials Group's products mainly include PBAT products primarily used for packaging materials and agricultural film. Red Avenue New Materials Group is positioned in the midstream of the industrial chain, supplying functional resins, photoresists, and auxiliary chemicals to downstream industries such as tire, automotive, semiconductor, and display panel manufacturers. The companys main raw materials include phenol, formaldehyde, resins, and solvents. In addition to procuring raw materials from suppliers, Red Avenue New Materials Group is also committed to extending its core product business upstream in the industrial chain to expand into the production of key raw materials and intermediates, aiming to achieve in-house production of several key intermediates to ensure supply stability, enhance cost control capabilities, and improve the overall ability to provide comprehensive supply services to downstream customers. As of the last practicable date, Red Avenue New Materials Group has seven production facilities, namely (i) Tongcheng Chemical Plant; (ii) Huachi Plant; (iii) Tongcheng Zhenjiang Plant; (iv) Tongcheng Electronics Plant; (v) Hubei Beixu Plant; (vi) Kehua Plant; and (vii) Tongcheng Changzhou Plant. Red Avenue New Materials Group continues to invest and expand its production capacity through the construction of new production facilities as well as upgrading and expanding existing production lines. Looking ahead, Red Avenue New Materials Group is establishing a new rubber additive production base in Thailand to further enhance its global supply capabilities and support sustained business growth. Financial Information Revenue: In fiscal years 2023, 2024, 2025, and the first six months of 2026, Red Avenue New Materials Groups revenue was approximately 2.937 billion RMB, 3.263 billion RMB, 3.421 billion RMB, and 2.133 billion RMB respectively. Profit for the Year/Period: In fiscal years 2023, 2024, 2025, and the first six months of 2026, Red Avenue New Materials Groups profit for the year/period was approximately 404 million RMB, 534 million RMB, 577 million RMB, and 389 million RMB respectively. Industry Overview China has become one of the largest semiconductor consumer markets in the world, with downstream applications covering various fields such as consumer electronics, telecommunications, automotive electronics, and artificial intelligence. Supported by demand growth and governmental policies, the domestic chip manufacturing industry is experiencing rapid development. From the perspective of market size, the integrated circuit industry in China is projected to grow from 1 trillion RMB in 2021 to 1.4 trillion RMB in 2025, with a compound annual growth rate (CAGR) of 8.2%. In the future, the market size of Chinas integrated circuit industry is expected to continue to maintain high-speed growth, reaching 2.1 trillion RMB by 2030, with a CAGR of 8.0% from 2025 to 2030. In terms of global sales revenue of semiconductor photoresists, ArF photoresist sales are expected to increase from 1.2 billion USD in 2021 to 1.4 billion USD in 2025, and reach 2.1 billion USD by 2030, with a CAGR of 9.3%. KrF photoresist sales revenue is projected to rise from 700 million USD in 2021 to 900 million USD in 2025, with a CAGR of 6.5%, and to reach 1.3 billion USD by 2030, with a CAGR of 6.0%. Sales revenue for EUV photoresists is anticipated to grow from 200 million USD in 2021 to 300 million USD in 2025, and is expected to reach 900 million USD by 2030, with a CAGR of 22.9% from 2025 to 2030. Sales revenue for G/I line and other photoresists is expected to grow from 500 million USD in 2021 to 600 million USD in 2025, and reach 700 million USD by 2030. In the Chinese semiconductor photoresist market, ArF photoresist sales are projected to increase from 1.5 billion RMB in 2021 to 3.5 billion RMB in 2025, with a CAGR of 23.6%, and are expected to reach 7.1 billion RMB by 2030, with a CAGR of 15.2%; KrF photoresist sales revenue is expected to grow from 1.4 billion RMB in 2021 to 2.4 billion RMB in 2025, with a CAGR of 14.4%, and reach 4.4 billion RMB by 2030, with a CAGR of 12.9%; G/I line and other photoresist sales revenue is anticipated to increase from 700 million RMB in 2021 to 1.1 billion RMB in 2025, with a CAGR of 12.0%, and reach 1.6 billion RMB by 2030, with a CAGR of 7.8%. Board Information The Board of Red Avenue New Materials Group consists of five executive directors, one non-executive director, and four independent non-executive directors. Shareholding Structure Ms. Zhang Ning and the entities controlled by her, namely Tongcheng Investment and Virgin Holdings, will be the controlling shareholders of the company. Virgin Holdings is (i) 99.9% owned by Ms. Zhang; and (ii) 0.1% owned by Tongcheng Investment. Under the Securities and Futures Ordinance, Ms. Zhang is deemed to have an interest in the shares held by Virgin Holdings. Intermediary Team Exclusive Sponsor: HAITONG INT'L Capital Limited Company Legal Advisors: Zhao Buyu & Ma Guoqiang Law Firm, Jintiancheng Law Firm in Shanghai, Stephen Peepels Legal Advisors for the Exclusive Sponsor: Han Kun Law Offices, Beijing Dacheng (Shanghai) Law Firm Auditors and Reporting Accountants: Ernst & Young Industry Advisors: Frost & Sullivan (Beijing) Consulting Co., Ltd., Shanghai Branch