Haian Group’s IPO application accepted

On 12 June, Haian Rubber Group (Haian Group)’s application for an initial public offering (IPO) on Shenzhen Stock Exchange was accepted, according to official filings.

Founded in 2005, Haian Group manufactures giant all-steel radial OTR tyres. The company has mass-production capabilities for tyres with 49 inches and above-rim diameters. Haian Group stated that they mainly adopt the production model of “production based on sales”, and their customers include mining companies, mining machinery manufacturers, mining service contractors, and tyre traders.

The company is currently in the hands of founder Zhu Hui. Zhu Hui himself directly holds a 19.5 per cent stake in Haian Group. Meanwhile, Xinhui Group, in which Zhu Hui has 100 per cent of the shares, holds 28.32 per cent of the shares of Haian Group. Therefore, Zhu Hui holds 47.82 per cent of the shares of Haian Group.

In 2022, the tyre company’s revenue was 1.457 billion yuan, of which 68.51 per cent comes from “all-steel giant tyre sales” and 31.49 per cent comes from “mining tyre operation management”. Compared with the revenue of 742 million yuan in 2021, the revenue of Haian Group in 2022 has nearly doubled. According to the company’s disclosure, the rapid growth of revenue in 2022 is related to the Russian market. In 2022, the three major international tyre brands gradually withdrew from the Russian market. The sales scale of Haian Group’s all-steel giant tyre products in the Russian market has increased significantly.

The prospectus disclosed shows that the company plans to raise 2.95 billion yuan for production expansion, technical upgrading of automated production lines, construction of R&D centres, and additional working capital.

In the prospectus, Haian Group also disclosed its possible future operating risks. Some Chinese tyre manufacturers have begun to deploy, and the giant OTR market competition will gradually increase. At the same time, Haian Group has many overseas subsidiaries, and its export business accounts for a relatively high proportion, which also has certain risks.