According to the Zhitong Finance App, Rongli Construction (09639) will raise shares from September 27, 2024 to October 4, 2024. It plans to sell 0.25 billion shares globally. The public sale accounts for 10%, the placement accounts for 90%, and 15% over-allotment rights. The sale price per share is HK$0.57-0.73, with 5,000 shares per lot. It is expected that trading of the shares will commence on October 9, 2024 (Wednesday) on the Stock Exchange.

According to the announcement, the company has signed a cornerstone investment agreement with Sany Hong Kong, Gaosheng Group (01283) and Sanfeng, and Cornerstone investors have agreed to subscribe for shares in the sale with a total amount of HK$35 million according to the sale price.

Assuming that the over-allotment rights are not exercised and that, based on the sale price of HK$0.65 per share, the net proceeds from the global sale will be approximately HK$0.1305 billion, approximately 45% will be used to acquire more electrical machinery and equipment, about 35% will be used to pay for the upfront costs of new projects, and about 5% will be used to recruit new employees; about 5% will be used to procure safe smart construction site systems (4S) and enterprise resource planning systems; and approximately 10% will be reserved for general working capital.

According to reports, the company is a large-scale Hong Kong contractor engaged in civil engineering and cable engineering and solar photovoltaic system engineering. The company's civil engineering focuses on site preparation and road and drainage works, while cable engineering focuses on cable trenching, laying and connection projects. As far as solar photovoltaic system engineering is concerned, the company focuses on the design, installation and maintenance of solar photovoltaic systems. Second, during the track record period, in a few projects the company participated in (mainly Project #01), the company will temporarily lease machinery and trade construction materials from contractors and subcontractors.

During the track record period, the third runway project has been the main driver of the company's business and financial performance. For example, in fiscal year 2021/22, fiscal year 2022/23 and 2023/24, the third runway project contributed about HK$0.255 billion, HK$92.7 million and HK$0.241 billion respectively, accounting for about 96.8%, 80.9% and 80.0% of the company's site leveling engineering service revenue and about 48.9%, 25.7% and 45.9% of the company's total revenue in the corresponding fiscal year.