Group Overview

The Group is one of the manufacturers of heavy truck interior products in China. Its products mainly include all kinds of automobile interior parts for heavy truck or passenger car installation, followed by the production of exterior parts. Among them, heavy truck decoration products include parts made of thermoplastic materials and textile materials, such as floor mats, instrument panels, canopies and overhead boxes. According to Frost & Sullivan's report, based on the sales value of heavy truck interior products, the group is the largest manufacturer of heavy truck interior products in northwest China.

Industry Overview

According to Frost & Sullivan's report, the size of China's heavy truck interior products market increased from about 1.44 billion yuan in 2013 to about 2.14 billion yuan in 2017, with a compound annual growth rate of about 10.5%. The report predicts that the volume will increase to RMB 2.13 billion by 2022, with a compound annual growth rate of 2.3% between 2018 and 2022.

Risks

In 2017, the cost of the main raw materials used in group production accounted for about 80% of the total sales cost. Due to competition and market pressure, if the cost of raw materials rises, the group may not be able to pass on the increase in raw material costs to customers, leading to an adverse impact on the group's profitability.

valuations

According to the prospectus, assuming that the global offering was completed on June 30, 2018, 2 billion shares are expected to be issued as soon as the share sale is completed. The net value range of tangible assets per share adjusted without review and comments is 0.11 to HK$0.12 (converted at the exchange rate of RMB 1 to HK$1.13).