IPO News | Tongcheng New Materials (603650.SH) was released for the second time. The Hong Kong Stock Exchange ranked first in sales in the global and Chinese market sales of phenolic resin rubber additives for tires

The Zhitong Finance App learned that according to the Hong Kong Stock Exchange's disclosure on August 21, Tongcheng New Materials Group Co., Ltd. (603650.SH)) submitted a listing application to the main board of the Hong Kong Stock Exchange, with Cathay Pacific Haitong/Haitong International as the sole sponsor. The company submitted a listing application to the Hong Kong Stock Exchange on February 8.

Company profile

According to the prospectus, Tongcheng New Materials is a comprehensive new materials service provider in China, focusing on advanced chemical products. The company is mainly engaged in R&D, production, marketing, sales and distribution of new chemical materials (refers to newly developed or improved traditional materials, with superior properties or specific functional characteristics). During the track record period, the main business of Tongcheng New Materials included three divisions, namely (i) rubber additives for tires and other chemical products; (ii) electronic materials; and (iii) fully biodegradable materials. As far as the tire rubber additives and other chemical products segment is concerned, according to Frost & Sullivan's report, Tongcheng New Materials ranked first in the global and Chinese tire phenolic resin rubber additives markets in fiscal year 2025, with market shares of 41.4% and 45.9% respectively. In the field of electronic materials, Tongcheng New Materials ranked first among local suppliers in the sales value rankings of the Chinese semiconductor photoresist market and the Chinese TFT array photoresist market in fiscal year 2025, with market shares of 5.8% and 26.2% respectively.

In the tire rubber additives and other chemical products business segment, the main product categories of Tongcheng New Materials include rubber resins and additives, such as phenolic resins, PTBP and other chemical products. These products are mainly used to produce automobile tires and other rubber products to optimize various properties of rubber products, such as their viscosity, strength and safety. The product supply of Tongcheng Xincai 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 light-emitting materials. Tongcheng Xincai's electronic materials are mainly used for downstream customers to produce semiconductors and display panels. As far as the fully biodegradable materials division is concerned, Tongcheng New Materials's products mainly include PBAT products mainly used for packaging materials and agricultural mulching.

Tongcheng New Materials is positioned in the middle of the industrial chain, supplying functional resins, photoresists and auxiliary chemical products to downstream industries such as tire, automobile, semiconductor and display panel manufacturers. The main raw materials of Tongcheng New Materials include phenol, formaldehyde, resins and solvents. In addition to procuring raw materials from suppliers, Tongcheng New Materials is also committed to extending our core product business upstream in the industrial chain to the production of key raw materials and intermediates, with a view to achieving internal production of several key intermediates, thereby ensuring supply stability, improving cost control capabilities, and improving the overall ability to provide comprehensive supply services to downstream customers.

As of the last practical date, Tongcheng New Materials had seven production facilities, namely (i) Tongcheng Chemical Plant; (ii) Huaqi Plant; (iii) Tongcheng Zhenjiang Plant; (iv) Tongcheng Electronics Factory; (v) Hubei Beixu Plant; (vi) Kehua Plant; and (vii) Tongcheng Changzhou Plant.

Tongcheng New Materials continues to invest and expand production capacity by building new production facilities and upgrading and expanding existing production lines. Looking ahead, Tongcheng New Materials is setting up a new rubber additives production base in Thailand to further enhance global supply capacity and support continued business growth.

Financial data

Revenue:

In fiscal year 2023, fiscal year 2024, fiscal year 2025, and the first six months of 2026, the revenue of Tongcheng New Materials was approximately RMB 2,937 billion, RMB 3.63 billion, RMB 3,421 billion, and RMB 2,133 billion, respectively.

Profit for the year/period:

In fiscal year 2023, fiscal year 2024, fiscal year 2025, and the first six months of 2026, Tongcheng New Materials's annual/period/annual/period profit was approximately RMB 404 million, RMB 534 million, RMB 577 million and RMB 389 million respectively.

Industry Overview

China has become one of the world's largest semiconductor consumer markets. Downstream applications cover various fields such as consumer electronics, communications, automotive electronics, and artificial intelligence. Driven by demand and national policy support, the domestic chip manufacturing industry is in a stage of rapid development. Looking at the market size of China's integrated circuit industry, the market size of the integrated circuit industry grew from RMB 1.0 trillion in 2021 to RMB 1.4 trillion in 2025, with a compound annual growth rate of 8.2% during the period. In the future, the market size of China's integrated circuit industry is expected to continue to grow rapidly. It is expected to reach RMB 2.1 trillion by 2030, with a compound annual growth rate of 8.0% between 2025 and 2030.

Judging from the sales value of the global semiconductor photoresist market, ArF photoresist sales revenue increased from US$1.2 billion in 2021 to US$1.4 billion in 2025, and is expected to reach US$2.1 billion by 2030, with a compound annual growth rate of 9.3% during the period. KrF photoresist sales revenue grew from US$700 million in 2021 to US$900 million in 2025, at a CAGR of 6.5%, and is expected to reach US$1.3 billion by 2030, with a CAGR of 6.0% during the period. EUV photoresist sales revenue grew from US$200 million in 2021 to US$300 million in 2025, and is expected to reach US$900 million in 2030, with a compound annual growth rate of 22.9% from 2025 to 2030. Sales revenue for G/I lines and other photoresists grew from US$500 million in 2021 to US$600 million in 2025, and is expected to reach US$700 million in 2030.

Looking at the sales value of the semiconductor photoresist market in China, ArF photoresist sales revenue increased from RMB 1.5 billion in 2021 to RMB 3.5 billion in 2025, with a compound annual growth rate of 23.6%, and is expected to reach RMB 7.1 billion in 2030, with a compound annual growth rate of 15.2%; KrF photoresist sales revenue increased from RMB 1.4 billion in 2021 to RMB 2.4 billion in 2025, with a compound annual growth rate of 14.4%. It is expected to reach RMB 4.4 billion in 2030, with a compound annual growth rate of 12.9 billion yuan during the period %; Sales revenue for G/I lines and other photoresists increased from RMB 700 million in 2021 to RMB 1.1 billion in 2025, with a compound annual growth rate of 12.0%. It is expected to reach RMB 1.6 billion in 2030, with a compound annual growth rate of 7.8%.

Board Information

The board of directors of Tongcheng Xincai consists of five executive directors, one non-executive director and four independent non-executive directors.

Shareholding structure

Ms. Zhang Ning and the entities she controls, namely Tongcheng Investment and Virgin Holdings, will be the controlling shareholders of the company.

Virgin Holdings (i) is 99.9% held by Ms. Zhang; and (ii) 0.1% is held by Tongcheng Investment. Under the Securities and Futures Ordinance, Ms. Cheung is deemed to have an interest in shares held by Virgin Holdings.

Intermediary team

Sole sponsor: Haitong International Capital Co., Ltd.

Company legal advisors: Zhao Fuyu, Ma Guoqiang Law Firm, Shanghai AllBright Law Firm, Stephen Peepels

Sole sponsor's legal advisors: Han Kun Law Firm Limited Liability Partnership, Beijing Dacheng (Shanghai) Law Firm

Auditors and reporting accountants: Ernst & Young

Industry Advisor: Frost & Sullivan (Beijing) Consulting Co., Ltd. Shanghai Branch