Red Avenue New Materials Group Co., Ltd. (stock code: "09607"), trading as RA Materials, listed on the Hong Kong Stock Exchange today.

The company priced its offering at HK$44 per share, issuing 68.1187 million shares and raising a total of HK$2.997 billion. After deducting HK$95.93 million in listing expenses, net proceeds amounted to HK$2.9 billion.

RA Materials opened at HK$40, down 9% from its offer price, and the stock has since declined more than 10%, giving the company a market value of HK$26.8 billion.

RA Materials already listed on the A-share market in 2018. Its A-share price currently stands at RMB 64.49, with a market value of RMB 39.681 billion. With this Hong Kong listing, RA Materials has established an "A+H" dual-listing structure.

The H-share discount to the A-share stands at negative 48%.

China CITIC Bank Investment and Lin Lijun Face Paper Losses

The cornerstone investors in RA Materials include China CITIC Bank Investment, Full Truck Alliance, Golden Valley Master under Lin Lijun, Goldshore under Wang Xuning, Happy Wisdom under Ms. Tan Qing, Prinx Chengshan Hong Kong, Yang Quanhai, and Ms. Zhou Bo, who collectively subscribed to US$126 million (approximately HK$988 million).

Among them, China CITIC Bank Investment subscribed US$18 million, Full Truck Alliance subscribed US$20 million (approximately HK$157 million), Golden Valley Master subscribed US$10 million, Goldshore under Wang Xuning subscribed US$45 million (approximately HK$353 million), Happy Wisdom subscribed US$15 million, Prinx Chengshan Hong Kong and Yang Quanhai each subscribed US$5 million, and Zhou Bo subscribed US$8 million.

With RA Materials breaking below its offer price on debut, Wang Xuning faces a paper loss of US$5 million (approximately RMB 33.5 million), while China CITIC Bank Investment, Full Truck Alliance and others also face paper losses.

First-Half Revenue of RMB 2.1 Billion and Profit of RMB 390 Million

According to the prospectus, RA Materials reported revenue of RMB 2.937 billion, RMB 3.263 billion and RMB 3.42 billion for 2023, 2024 and 2025 respectively; gross profit of RMB 685 million, RMB 800 million and RMB 814 million; gross margins of 23.3%, 24.4% and 23.8%; and profits of RMB 400 million, RMB 534 million and RMB 577 million, with profit margins of 13.8%, 16.4% and 16.9%.

In the first half of 2026, RA Materials generated revenue of RMB 2.133 billion, gross profit of RMB 487 million, a gross margin of 22.9%, and a profit of RMB 389 million.

In the first half of 2026, revenue from tire rubber additives and other chemical products reached RMB 1.32 billion, accounting for 61.9%; revenue from electronic materials was RMB 693 million, accounting for 32.5%; and revenue from fully biodegradable materials was RMB 119 million, accounting for 5.6%.

As of June 30, 2026, RA Materials held cash and cash equivalents of RMB 436 million.

Yutong Investment Exits with RMB 660 Million

The executive directors of RA Materials are Ms. Zhang Ning, Ding Lin, Yuan Minjian, Yu Yaoming and Tang Jie; the non-executive director is Li Xiaoguang; and the independent non-executive directors are Zhang Yun, Jiang Changjian and Feng Yaoling. Ms. Zhang Ning holds Canadian nationality.

As of June 30, 2026, RED AVENUE INVESTMENT GROUP held 47.81% and Virgin Holdings held 13.01%. Also as of June 30, 2026, in RA Materials' shareholding structure, Shaanxi Coal Industry Co., Ltd. held 2.95%, Hong Kong Securities Clearing Company Limited held 0.76%, China People's Life Insurance Company Limited - Traditional - Ordinary Insurance Product held 0.71%, and Huatai Securities Company Limited - Penghua CSI Subdivided Chemical Industry Theme Exchange-Traded Open-End Index Securities Investment Fund held 0.41%.

RA Materials announced on June 4, 2026 that it had received a "Notice on Share Reduction Results" from Yutong Investment. As of June 4, 2026, Yutong Investment had reduced its holdings by a total of 11,434,623 shares through centralized bidding and block trades, representing 1.86% of the company's total share capital.

Yutong Investment reduced a total of 11,434,623 shares at prices ranging from RMB 51.80 to RMB 64.17 per share, cashing out a total of RMB 656 million. Yutong Investment no longer holds any shares in the company.