Migao Group (09879.HK), a leading potash company in China, will be offering shares from today (March 13) until next Monday (March 18). It is expected to be listed on the Hong Kong Stock Exchange on March 21, 2024, exclusively sponsored by GF.
MGM Group plans to sell 225 million shares globally, 90% of which are international sales, 10% public sales, and 15% over-allotment rights. The sale price per share ranged from HK$3.30 to HK$4.30, with 1,000 shares per lot, raising up to HK$968 million.
Assuming an offering price of HK$3.80 per share (median of the offering price range), MGM Group expects total listing expenses of approximately RMB 128 million, including 2% underwriting commission, up to 1% discretionary bonus, SEHK listing fee, SFC transaction levy, SEC transaction levy, legal and other professional fees, printing and other expenses.
In this IPO, Mico Group introduced 4 cornerstone investors, subscribed for a total of about HK$418.5 million in shares. Of these, October Inada (09676.HK) subscribed for US$20.9 million (approximately HK$163.6 million) through Xinchang, Shenyang Xinchang, the controlling shareholder of China Heart to Heart (01866.HK), subscribed HK$20 million (approximately HK$156.6 million), and Harvest Fund subscribed US$20 million (approximately HK$156.6 million), and Ms. MAK Siu Hang Viola's VMS Group subscribed for Mega (US$10 million) through Dynamic ( (Approximately HK$7.83 million).
The net capital raised by Mico Group in this IPO is approximately HK$714 million (based on the median sale price range of HK$3.80): approximately 45.2% will be used to build a storage and production center in Heilongjiang; about 28.2% will be used to invest in and build the company's new Sichuan production facilities; about 14.2% will be used to fund the establishment of the Sichuan R&D center; about 6.0% will be used to purchase new equipment and machines to replace existing equipment and machines for the company's production facilities in Guangdong, Changchun and Daxing; about 6.4% will be used as additional Working capital and other general corporate purposes.
MGM Group is the current IPO. Guangfa Finance (sole sponsor), GF Securities, and CMB International are the overall coordinators and joint global coordinators, and Anxin International is the co-global coordinator. Other underwriters include China Merchants Securities International, Agricultural Bank International, Everbright Securities International, Dongwu Securities, Shenwan Hongyuan Hong Kong, Orient Securities International, and Livermore Securities.
According to the prospectus, in the shareholder structure of Mico Group after listing, the controlling shareholder Mr. Liu Guocai held 75% of the shares through Migao BVI; public shareholders held 25% of the shares.
Migao Group, from Foshan, Guangdong, is a leading potash company in China. It has comprehensive capabilities integrating procurement, manufacturing, processing and sales. It mainly provides various types of potash fertilizer products, including potassium chloride, potassium sulfate, potassium nitrate, compound fertilizer, etc. According to Frost & Sullivan's report, based on 2022 potash sales, Migao Group ranked third among Chinese potash companies (market share of about 7.1%) and second among Chinese non-reserve potash companies; based on 2022 sales of potassium chloride, potassium sulfate and potassium nitrate, it ranked third, fourth, and fifth among Chinese potash companies, respectively, with market shares of 7.0%, 4.0%, and 0.3%, respectively. Migao Group has five main production facilities in Heilongjiang Province, Jilin Province, Guizhou Province and Guangdong Province. It has three potassium chloride granulation lines, 40 potassium sulfate production lines and three compound fertilizer production lines. The total estimated production capacity of potassium chloride granules, potassium sulfate and compound fertilizer is 390,000 tons, 363,000 tons, and 172,000 tons, respectively.
Link to the MGM Group prospectus:
https://www1.hkexnews.hk/listedco/listconews/sehk/2024/0313/2024031300020_c.pdf
