Guanglian Technology Holdings (02531) will be listed from June 28, 2024 to July 10, 2024, with a global offering of 63.6 million shares, of which 10% will be sold in Hong Kong, China and 90% will be sold internationally. The offering price is HKD 4.7-5.3 per share, with a minimum subscription of 500 shares. The shares are expected to start trading on the Stock Exchange of Hong Kong at 9:00 a.m. on July 15, 2024.

The company has entered into cornerstone investment agreements with Guohuilian Equity Investment Fund Partnership Enterprise (Limited Partnership) (Guohuilian), in which it has agreed to subscribe (subject to various conditions) to HKD 88 million (cornerstone placement) of the public offering shares.

Assuming an indicative offer price of HKD 5.0 per share (i.e., the median of the indicative offer price range of HKD 4.7 to HKD 5.3 per share), the Group estimates that it will receive a net proceeds of approximately HKD 248 million from the global offering.

The Group plans to use the net proceeds from the global offering as follows over the next five years: approximately HKD 92.5 million (approximately 37.3% of the estimated net proceeds) to enhance and further strengthen the Group's R&D capabilities through the development of technology and functionality improvements, thereby enhancing the Group's competitiveness. This includes approximately 10.5% for the development of innovative functions for the Group's SaaS marketing and management services, approximately 10.0% to enhance the Group's algorithmic modeling capabilities, approximately 6.8% to upgrade sales of existing car hardware products, approximately 5.8% to enhance cloud-native technology in the Group's products and services, and approximately 4.1% to increase investments in cloud infrastructure. The Group plans to allocate approximately HKD 81.3 million (approximately 32.7% of the estimated net proceeds) over the next five years to expand the range of the Group's services and launch the Group's products and services to cover more businesses and applications on the automotive industry chain to other participants. This includes approximately 19.5% to increase the Group's penetration rate among 4S dealers, approximately 8.5% to expand to insurance companies, and approximately 4.7% to expand to auto manufacturers. The Group plans to allocate approximately HKD 49.6 million (approximately 20.0% of the estimated net proceeds) over the next three years to seek potential strategic acquisitions and investment opportunities that can supplement or enhance the Group's existing businesses. Approximately HKD 24.8 million (approximately 10.0% of the estimated net proceeds) will be used as working capital and for general corporate purposes.

The Group is a provider of in-car hardware and SaaS marketing and management services for participants in China's automotive aftermarket, focusing on (i) selling car hardware products to industry participants in the value chain, and (ii) offering SaaS marketing and management services, including SaaS subscription services and value-added services. The automotive aftermarket industry is highly fragmented and consists of numerous sub-industries. Based on revenue, the market size for car hardware sales and SaaS marketing and management services in the automotive aftermarket industry in 2023 is estimated to account for approximately 0.5% and 0.4% of the larger segment of the automotive aftermarket industry, respectively. According to a report by Zhuge Consulting, the Group ranks first among SaaS marketing and management service providers in China's automotive aftermarket industry in terms of revenue in 2023, with a market share of 6.1%, while ranking third among in-car hardware providers in the industry with a market share of 3.4%.

Since its establishment in Shenzhen in 2012, the Group has aimed to empower its customers in the automotive aftermarket industry by leveraging the Group's sales of car hardware products and offering SaaS marketing and management services to establish better connections with customers, thereby achieving improved marketing and management capabilities and efficiency. With more than a decade of operating experience, the Group, along with its industry insights and the power of technology, has developed a set of industry-specific products and services for industry participants (such as 4S shops) in the automotive aftermarket industry to improve their marketing and operational efficiency.

The Group's total revenue increased from RMB 327 million in the 2021 fiscal year to RMB 414 million in the 2022 fiscal year, a year-on-year increase of approximately RMB 87.1 million or 26.7%, and increased from RMB 414 million in the 2022 fiscal year to RMB 561 million in the 2023 fiscal year, a year-on-year increase of approximately RMB 147 million or 35.4%.