It is estimated that on September 27, 2019, CR Construction Group Holdings Limited (“CR Construction”; Stock code: 1582.HK) through the Hong Kong Stock Exchange listing hearing, officially launched the global public offering, China First Capital Group (“CFCG” or the “Group”; Stock code: 1269.HK), a wholly-owned subsidiary, First Capital Financial Group Limited (“FC Financial Group”) and its First Capital Securities Limited (“FC Securities”) act as joint bookrunner and joint lead managers.
CR Construction plans to issue 138.85 million shares in this IPO, of which 124.965 million shares will be allocated, accounting for about 90% of the total number of shares initially offered. The remaining 13.885 million shares will be put on public sale in the Hong Kong market, with each share price ranging from HKD 1.0 to HKD 1.4 of 2,500 shares per lot at a fund-raising scale of about HKD 138.9 million to HKD 194.4 million. CR Construction will be listed on the main board of the Stock Exchange of Hong Kong on October 16 after its IPO application period from September 27 to October 3 and its selling price and results will be announced on October 15.
Multiple advantages to consolidate Hong Kong's leading position in construction
CR Construction Group (named Tianshun Co., Ltd. before 1999 and China Resources Construction Co., Ltd. after 1999) was established in 1967. As the main contractor in Hong Kong, it mainly undertakes building construction projects and RMAA projects of public and private organizations. With 50 years of experience, it is one of the leading building contractors in Hong Kong. In January 2014, Zhejiang Construction Investment Group acquired CR Construction and became the final parent company of CR Construction, while Zhejiang Construction Investment was 45.95% owned by Zhejiang State-owned Capital, which was shown in the prospectus as a state-owned enterprise wholly owned by Zhejiang SASAC.
2In 2016-2018, CR Construction achieved revenue of HKD 2.577 billion, HKD 3.141 billion and HKD 4.814 billion respectively, with a compound growth rate of 36.68% from 2016 to 2018. As of March 31, 2019, revenue was HKD 1.115 billion. During the same period, most of the company's revenue came from building construction projects, and the revenue recorded a substantial increase. According to the information reported by China Insights Consultancy, as of December 31, 2018, CR Construction ranked the third among all main contractors in Hong Kong in terms of revenue from building construction works for the year ended 31 December 2018 with a market share of approximately 5.2%.
Data reported by China Insights Consultancy show that the growth momentum of Hong Kong's building construction industry is expected to lead to an increase in the gross output value of building construction projects from about HKD 89.7 billion in 2018 to HKD 131.3 billion in 2023, a compound annual growth rate of 7.9%. In view of the expected growth of Hong Kong's public and private building construction industry, CR Construction believes that it has five advantages to meet the opportunities and challenges of the industry: (i) established history and a proven track record in the building construction works and RMAA works industries; (ii) well positioned to secure emerging opportunities in public and private building construction works development; (iii) long-standing and strong relationships with our major business partners; (iv) stringent quality control and high safety standard and environmental impact control; and (v) experienced and committed management team and professional staff members..
Engineering quality is the key to success. CR Construction has always attached great importance to providing consistent and high-quality services, and attaches great importance to establishing and maintaining an effective and comprehensive quality management system, including ISO9001, ISO14001 and OHSAS 18001 certification from Hong Kong Quality Assurance Bureau and ISO50001 certification from internationally recognized certification. In the past, it has undertaken a number of representative projects abroad, including the Phase I of Hong Kong Police Headquarters, several housing authority housing projects and the Phase IV expansion of Yan Chai Hospital. Among them, the new school building project of Chu Hai College of Higher Education successfully won the “Luban Prize” (overseas project) for China's construction project in 2018.
In addition, the company also won important awards and recognition including the 2014 Quality Building Award-Hong Kong Construction Project (Renovation/Activation Project), the 2014 Quality Building Award-Hong Kong Non-residential Project (New Construction Project), the 2017 Annual Construction Project Team Award issued by the Royal Institute of Chartered Surveyors and other important awards and recognition, which are widely praised by the market.
Picture: Vision of CR Construction Company
This time, taking advantage of the east wind of the listing and building a good reputation and influence in Hong Kong's building construction industry and RMAA engineering industry, CR Construction will firmly grasp the new business opportunities emerging in Hong Kong's building industry and continue to consolidate and strengthen its leading position in Hong Kong's building construction industry.
Investment banking services are making renewed efforts to deepen diversified financial services
In recent years, FC Securities have played an important role in the IPO of educational and non-educational enterprises in Hong Kong. The market position of the industry has gradually become prominent, and the brand value of diversified financial services has been further enhanced.
Since 2019, FC Securities has participated in the exclusive placement of shares in Ernest Borel and the IPO underwriting of Rizhao Port Jurong and Scholar Education, serving as joint global coordinators, joint bookrunners and joint lead managers respectively. This time, FC Securities once again made efforts to act as the joint account book manager and the joint lead manager, and to cooperate with other intermediary agencies to escort the IPO of CR Construction.
In 2018, the total number of IPO underwriting for FC Securities reached 12, including 7 for education shares and 5 for non-education shares. The industries involved include real estates, high-end manufacturing, clothing and other industries, and they are actively building high-quality investment banks that are good at education but not limited to education. In addition, FC Securities ranked twenty-first on Bloomberg’s list of securities dealers by IPO underwriting business in Hong Kong in 2018 in terms of the number of underwritten projects, and ranked thirtieth in terms of the amount of IPO proceeds raised.
On April 15 this year, FC International Finance was successfully approved as a sponsor and became one of the 115 sponsors in Hong Kong. With FC International Finance acting as a co-sponsor in Unity & Strength Energy’s acquisition of Hengyong Global Investment, it successfully polished the brand of the business. In recent years, relying on rich project experience, strong investment bank team, extensive business network and multi-level customer service channels, FC Financial Group has successfully provided many customers with corporate financing, underwriting, securities trading, investment consulting, asset management and other services, which have been well received and affirmed by customers, and has continuously expanded and consolidated the influence and position of the industry. The diversified and comprehensive operation advantages of FC Financial Group in the investment banking field are further highlighted, laying a solid foundation for the Group to continue to deepen diversified financial services!