On April 19, 2024, Rongda Hezhong (Xiamen) Technology Group Co., Ltd. (hereinafter referred to as “Rongda Hezhong”) from Xiamen, Fujian, submitted a prospectus to the Hong Kong Stock Exchange to be listed on the Hong Kong Main Board.

Rong Dazhong considered listing on A-shares and hired Guojin Securities as the listing guidance agency on June 25, 2021. After that, they voluntarily decided not to apply for A-share listing, did not apply for an official A-share listing, and terminated the employment of the counseling agency in April 2023.

Link to the prospectus of the United States of America:

https://www1.hkexnews.hk/app/sehk/2024/106406/documents/sehk24041902152_c.pdf

Main business

Rong Da He-Chung, founded in 2010, is a supplier of automatic identification data collection (AIDC) devices and solutions, engaged in R&D, design, manufacture and marketing of special printers, scales, POS terminals and PDAs. The company's products are sold to more than 140 countries, including but not limited to the United States, Malaysia, Spain, France, Argentina, Brazil and the United Arab Emirates, as well as no less than 30 provinces, municipalities and autonomous regions in China.

According to Frost & Sullivan data, in terms of revenue in 2022, Rongda United is the fourth largest company in the Chinese specialty printer market, with a market share of 2.5%.

As of April 9, 2024, Rongda United has provided more than 100 standard models of products, which are widely used in various industries, including but not limited to retail, education, catering, logistics, warehousing, manufacturing, hospitality, medical and environmental industries. The comprehensive products provided by the company can provide one-stop AIDC solutions and promote the digital upgrading of customer business. For example, the company has developed POS terminals with built-in printing modules, cameras, and NFC readers to meet the specific requirements of customers in automation, reduced operating costs, data management, and transaction management, and are used in various industries. The company's specialized printers and PDAs also allow users in the logistics, warehousing and manufacturing industries to track real-time inventory location and status, manage packages through printing and tracking labels and barcodes, and centralize data management and analysis. In the education industry, the company cooperated with a customer (an intelligent educational device supplier that sells a leading brand of portable learning printers in China) to develop a portable learning printer, equipped with optical character recognition (OCR) text recognition and text editing functions, specially designed for students to obtain study materials and prepare assignments and notes. The company is one of the customer's main suppliers. According to Frost & Sullivan, Rongda United ranked first in the Chinese portable learning printer supply market in 2022 based on production value, with a market share of 20.7%.

In 2022, Rong Dazhong began manufacturing and selling artificial intelligence scales equipped with artificial intelligence visual product recognition technology, which can automatically, in real time, and accurately identify and weigh retail products in supermarkets and efficiently print price tags. In 2023, Rongda will expand its business scope to the medical industry to produce medical wristband label printers. This is an antibacterial printer equipped with an NFC automatic detection function for missing paper, which can print high-frequency radio frequency identification wristbands for patients. In addition, Rongda United developed a hazardous waste label printer in 2023, expanding its influence in the environmental protection industry. The printer can be connected to a national or local hazardous waste treatment platform to print labels with specific hazard signs.

Shareholder structure

According to the prospectus, in the pre-listing shareholder structure, Rong Dazhong

Mr. Xu Kaiming holds 39.77% of the shares;

Mr. Xu Kaihe holds 2.95% of the shares;

Xiamen Rongxin (Mr. Xu Kaiming 99%, Mr. Xu Kaihe 1%) holds 47.81% of the shares;

The employee shareholding platform Xiamen Gaoli Zhongcheng (Mr. Xu Kaihe is the general partner), holding 1.33% of the shares;

The employee-owned platform Xiamen Gaoli Group (Mr. Xu Kaiming is the general partner), holding 1.19% of the shares;

The brothers Xu Kaiming and Xu Kaihe hold a total of about 93.05% of the above shares. The above shareholders are a group of controlling shareholders.

Mr. Lin Huanan holds 3.29% of the shares;

Mr. Yang Litie holds 1.38% of the shares;

Guangyun Technology (688365.SH) holds 1.07% of the shares;

Jiangsu Zhanbo (Mr. Pan Baogang 98%, Ms. Yuan Lanfang 2%), holding 0.65% of the shares;

Xiamen Chengfeng Junhua and Xiamen Jiayi Junde (the two companies have the same shareholders: Mr. Yang Jundu 98% and Mr. Wang Maodan 2%), holding 0.49% and 0.07% of the shares respectively;

Directors and Executives

The board of directors of Rong Dazhong consists of 6 directors, including 3 executive directors (Mr. Xu Kaiming, Mr. Xu Kaihe, and Ms. Lin Yanqin) and 3 independent non-executive directors (Dr. Lin Junhua, Dr. Yu Xiaonou, and Dr. Huang Liqin).

3 members of the Supervisory Board (Ms. Chai Ling, Mr. Jiang Jingtao, Mr. Fu Jianfang).

In addition to the executive director, executives include Mr. Hu Zunfa, Secretary of the Board of Directors, Chief Financial Officer, Deputy General Manager, Director of Major Accounts and Joint Company Secretary; Mr. Fu Jianfang, general manager of the Weighing Equipment Division; and Ms. Lin Cheng, head of the international department.

Company performance

According to financial data, in the past year of 2021, 2022 and 2023, Rongdaheong's operating income was RMB 380 million, 393 million yuan and 349 million yuan, respectively. The corresponding net profit was RMB 29.276 million, 37.4.47 million and RMB 27.603 million, respectively. The corresponding adjusted net profit was RMB 33.285 million, 45.05 million, and 36.208 million yuan, respectively.

Intermediary team

Rong Dazhong's intermediary team for this IPO mainly includes: Yuexiu Finance as its sole sponsor; PricewaterhouseCoopers as its auditor; Tianheng United and Jingtian Gongcheng (Hong Kong) as its Chinese lawyer; Zhong Lun as its brokerage firm's Chinese lawyer; Lu Feng evaluator as its property valuer; and Frost Sullivan as its industry advisor.