The "tens of billions" sales have suspended the H-share listing, but there are new moves

Superstar Technology, a "billion-dollar seller", has made new moves recently after signing a $40 million contract with a large American retail company.

On July 1, Giant Star Technology issued an announcement stating that it had decided to terminate its H-share listing and planned to issue global depositary receipts and list on the Swiss or London Stock Exchange. This is the 13th company to plan to issue global depositary receipts overseas this year.

If the offering is successful, it will greatly enhance Giant Star Technology's reputation in overseas markets and build an overseas capital platform for it, but completing the offering is not easy ...

Giant Star Technology suspends H-share listing and turns to European and American capital markets

Giant Star Technology stated that taking into account the company's actual development needs and in order to fully enjoy the favorable opportunities of capital market reform and strong policy support, the company's board of directors decided to terminate the issuance of overseas listed foreign shares ( H shares) and list on the Hong Kong Stock Exchange Limited.

At the same time, Giant Star Technology will start the preparation work for issuing global depositary receipts overseas and listing on the Swiss or London Stock Exchange . Currently, Giant Star Technology is discussing the relevant work with relevant intermediaries, and the specific details have not yet been determined.

Global depositary receipts are when a listed company deposits its shares in a foreign bank according to a deposit agreement, and the latter issues a receipt as proof of deposit. These receipts are global depositary receipts. By buying and selling these receipts, international investors can indirectly invest in the company's shares.

It is reported that Giant Star Technology suspended its H-share listing and turned to the European and American capital markets mainly for two considerations : 1. To conform to the company's international development trend and build an overseas capital platform; 2. To seize the special economic period in Europe and make full use of the capital market to increase industry integration.

Affected by the global epidemic and the war between Russia and Ukraine, the current economic and political environment in Europe is rather special. After the successful issuance of global depositary receipts, Giant Star Technology can use the funds obtained from this issuance to continue to increase the integration of leading brands in the industry.

It can be said that this move has important strategic significance for the future development of Giant Star Technology in the international market, but it is not easy to successfully complete the issuance and list on the Swiss or London Stock Exchange.

It is reported that in addition to being submitted to the company's board of directors and shareholders' meeting for review, the issuance and listing of depositary receipts also require approval, authorization or filing by domestic and foreign competent authorities such as the China Securities Regulatory Commission, the Swiss or London Stock Exchange. There is significant uncertainty as to whether the above-mentioned approval, authorization or filing can be obtained and ultimately implemented.

So far, the issuance plan, use of raised funds and feasibility of Giant Star Technology's issuance of depositary receipts and listing are still under discussion, which has great uncertainty. In addition, this issuance is also subject to the risk of being suspended or terminated due to the international environment, market environment, financing timing, supervision or other reasons.

Annual revenue exceeds 10 billion, with Europe and the United States accounting for more than 90%!

More than 90% of Giant Star Technology's operating income comes from Europe and the United States. Public data shows that in 2021, Giant Star Technology achieved a total operating income of 10.92 billion yuan, an increase of 27.80% compared with the same period last year. Among them, the operating income in the Americas was 7.522 billion yuan, accounting for 68.89% of the total revenue; the operating income in Europe was 2.399 billion yuan, accounting for 21.97% of the total revenue.

As of June 30, 2022, more than 95% of Giant Star Technology's revenue came from sales outside of China. Giant Star Technology currently has 10 factories outside of China and thousands of foreign employees. The company's operations are highly dependent on international collaboration between R&D in China, manufacturing in Southeast Asia, and sales services in Europe and the United States.

As a billion-dollar seller in the tool and storage cabinet industry, Giant Star Technology's main products include four categories: hand tools, power tools, laser measuring instruments, and storage cabinets. They are mainly used in home residential maintenance, construction projects, vehicle repair and maintenance, etc., among which home construction and related repair and maintenance account for the largest proportion of application channels.

At the same time, there are many independent buildings in Europe and North America, and the building area is large, which makes the maintenance cost of residents' houses high and time-consuming. In addition, the labor cost is high, so local residents are more willing to do the house repair and maintenance work by themselves, which has produced the famous European and American DIY culture. North America and Europe have also become the most important markets for the global tool industry.

In 2021, the global tool market exceeded US$90 billion for the first time, with a growth rate reaching a record high in nearly a decade. According to a report by Frost & Sullivan, driven by the continued urbanization of emerging economies and the economic recovery of developed countries, the global tool market is expected to grow at an annual rate of about 5% in the next five years.

It can be seen that the strategic decision of Giant Star Technology to turn to the European and American capital markets is also related to the high demand for its main business in the European and American markets. At the same time, turning to the European and American capital markets will also help to enhance the brand awareness of Giant Star Technology in the international market.

In 2021, Giant Technology's own brands, especially e-commerce brands, ushered in sustained growth. The sales revenue of brands such as WORKPRO, PONY JORGENSE, DURATECH, and SWISSTECH increased significantly year-on-year, and the sales revenue of its own brands reached 3.8 billion yuan for the first time.

In addition to making the strategic decision to move to the European and American capital markets, Giant Star Technology stated that it will also focus on its core business, establish itself in China, deploy globally, and plan for the long term as its basic strategy , seize the rare strategic development opportunities in the next three years, achieve leapfrog development, and strive to achieve a 20% year- on-year growth in its main business in 2022 .

At the same time, the company's own brand is the company's long-term and stable core competitiveness. The company said it will continue to invest in the promotion of its own brand products, and in 2022, it will ensure that the proportion of sales revenue from its own brand products continues to increase, striving to reach 40% of revenue.

In terms of the development of cross-border e-commerce business, Giant Star Technology stated that it will actively integrate its internal advantageous resources, orderly increase the product categories and service capabilities of cross-border e-commerce, and continue to maintain more than 50% growth in cross-border e-commerce business in 2022.

It is still very likely that Giant Star Technology will achieve the performance target set at the beginning of the year. The semi-annual performance forecast data shows that from January 1 to June 30, 2022, Giant Star Technology's net profit attributable to shareholders of listed companies was 655 million yuan to 801 million yuan, an increase of -10% to 10% compared with the same period last year; the net profit after deducting non-recurring gains and losses was 581 million yuan to 784 million yuan, an increase of 0% to 35% compared with the same period last year.

Under the circumstance that the overall growth rate of North American e-commerce business is declining, Giant Star Technology still achieved a growth of more than 50% in cross-border e-commerce business by relying on product line expansion and global e-commerce layout. At the same time, with the coming of a new round of housing delivery transaction peak in North America, it is expected that Giant Star Technology's main business income will continue to maintain a high growth in the future.

Giant Star Technology

Cross-border e-commerce

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