Business Overview Financial Summary

Dalipu Holdings is a special petroleum pipe manufacturer that specializes in manufacturing casings. It provides services including the development, manufacture and sale of special petroleum pipes and other petroleum pipes. They are mainly supplied to Chinese oil companies, special petroleum pipe manufacturers and petroleum pipe processing plants, and also manufacture pipe billets in-house to obtain stable and cost-effective supply of main production materials (that is, tube billets). The Group is also capable of developing and manufacturing tubing (another major petroleum-specific pipe product). According to the report, the Group (i) ranked third among all petroleum pipe manufacturers in China in 2018, with a market share of about 9.6% based on the sales value of special petroleum pipes in fiscal year 2018; and (ii) based on the sales value of special petroleum pipes (including special petroleum pipes and their semi-finished products, that is, flat end pipes) in fiscal year 2018, the Group ranked sixth among all petroleum pipe manufacturers in China and second among private manufacturers, accounting for about 7.7% of the market share of the petroleum specialty pipe market. The group's headquarters is in Cangzhou, Hebei Province, China, and sells products under the “Dalipu” brand name.

Competitive advantage

The Group is one of the leading manufacturers of special petroleum pipes among private manufacturers in China. It has a long history and a strong foundation within the industry

Has strong full-industry chain capabilities

High degree of automation, informatization and intelligence of production equipment

Risk Factors

The group's business will be affected by changes in central policies, oil market demand and price fluctuations, leading to the performance of the petroleum and petroleum management industry

The cost of key raw materials is increasing, and there is no way to maintain profitability

Group investment in developing new technology may not achieve commercial success

Use of proceeds

Approximately 88.4% was used as a second phase expansion

About 2.4% is used to enhance product R&D and innovation capabilities

Approximately 2.0% will be used to strengthen relationships with major customers, expand customer base and further expand sales to overseas markets

Approximately 7.2% is used as general working capital