On June 17th, 2024, Zhonggan Communication (Group) Holdings Limited (referred to as "Zhonggan Communication"), headquartered in Nam Cheong, Jiangxi, disclosed its listing prospectus after the hearing on the Hong Kong main board. It will soon be listed on the main board of the Hong Kong Stock Exchange. It submitted its application twice on June 30, 2023, and March 27, 2024, respectively.

Zhonggan Communication, which was listed on the National Equities Exchange and Quotations on January 25, 2017 with stock code 870720.OC, was delisted from the National Equities Exchange and Quotations on August 9, 2019.

Link to the prospectus of Zhonggan Communication after the hearing:

https://www1.hkexnews.hk/app/sehk/2024/106324/documents/sehk24061701162_c.pdf

Main Business

Established in 2002 and headquartered in Jiangxi, Zhonggan Communication is a well-known integrated service provider and software developer, focusing on providing telecommunications infrastructure services and digital solutions for telecommunications network operators. As of June 11, 2024, the company's business has expanded to 25 provinces, municipalities, and autonomous regions in China.

According to a report by Ipsos, based on 2023 revenue, Zhonggan Communication ranks third among all telecommunications network infrastructure construction and maintenance service providers in Jiangxi Province, with a market share of approximately 3.1%.

Telecommunications infrastructure services include:

• Infrastructure construction services mainly involve the construction, transformation, and installation of the entire telecommunications network infrastructure, such as base station and supporting engineering services, municipal electricity introduction services, transmission network pipeline services, broadband access network services, and wireless network equipment installation services.

• Infrastructure maintenance services mainly involve daily basic maintenance, repair and maintenance projects, and emergency fault handling of telecommunications infrastructure in rural and urban areas of China.

Digital solution services for infrastructure include:

• Integrated solution services usually involve providing turnkey solutions through the following methods: system design and planning, providing hardware and software and installation and integration services, and providing after-sales services (such as technical support services).

• System maintenance services generally include daily system and network maintenance and data backup support services, 24/7 technical support and consulting services, system migration solution services, and emergency fault troubleshooting services.

• Software solution services focus on selling independently developed software and delivering customized software development services.

Shareholder Structure

According to the prospectus, in the shareholder structure of Zhonggan Communication before listing, the controlling shareholders were Liu Haoqiong and Tao Xiulan, husband and wife.

Mr. Liu Haoqiong (70%) and Ms. Tao Xiulan (30%) hold 74.9% of the shares through GT & Yangtze.

Mr. Liu Dingyi (son of Mr. Liu Haoqiong) holds 8.2% of the shares through Octuple Hills.

Mr. Liu Dingli (son of Mr. Liu Haoqiong) holds 7.1% of the shares through Huat Huat.

Youpo Business holds 4.3% of the shares through Youpo British Virgin Islands.

The shareholders of Youpo Business are: Ms. Wang Wenchun (general partner, about 38.3%), Mr. Li Peichao (about 11.6%), Mr. Zhao Yijiu (about 11.6%), Mr. Wu Shuiyin (about 10.2%), and several other individuals (about 10.2%).

Yinghua Investment holds 2.6% of the shares through Yinghua British Virgin Islands.

Numerical Intelligence Deep Space under Shanghai Song Xian holds 1.3% of the shares through Numerical Intelligence Cayman.

Ruida Xintao holds 0.6% of the shares through Ruida British Virgin Islands.

Ruida Xintao's shareholders: Mr. Li Ning (general partner, 30%), Mr. Zhao Yang (40%), and Mr. Song Chuanken (30.0%).

Ms. Yang Kaijia holds 1% of the shares.

Board of directors and executives

The board of directors of Zhonggan Communications is composed of nine directors, including:

• 6 executive directors: Mr. Liu Haoqiong (chairman of the board), Mr. Peng Shengqian, Ms. Xie Xiaolan, Mr. Liu Dingli (son of Mr. Liu Haoqiong), Mr. Liu Dingyi (son of Mr. Liu Haoqiong), and Mr. Zhou Zhiqiang.

• 3 independent non-executive directors: Mr. Yu Shiyong, Mr. Li Yinguo, and Mr. Zhu Yugang.

In addition to the executive directors, the executives include Vice President Mr. Jiang Yiming.

Corporate Performance

According to the prospectus, Zhonggan Communications' revenues for 2021, 2022, and 2023 were RMB 479 million, RMB 413 million, and RMB 609 million, respectively. The corresponding net profits for the same periods were RMB 36.173 million, RMB 34.975 million, and RMB 68.646 million.

Intermediary Team

The main intermediary team for Zhonggan Communications' IPO includes: CITIC Securities as its exclusive sponsor; KPMG as its auditor; JunZeJun and Nixon Zhenglinhu as its Chinese and Hong Kong lawyers, respectively; Guangdong Zhuojian and Xia Liwen as its brokerage Chinese and Hong Kong lawyers, respectively; Henghui Evaluation as its property appraiser; and Ipsos as its industry consultant.