NewTimeSpace | IPO Watch: GON Technology Drives Growth via Dual Engines of Chemicals & Healthcare, Showcasing Industrial Integration Capabilities in Hong Kong Listing

QingDao GON Technology Co., Ltd. (02768.HK) officially kicked off its H-share offering on January 27, 2026, with an offer price range of HK$34 to HK$42 per share. Each trading lot consists of 200 shares, with an entry cost of approximately HK$8,484.71. The Company is scheduled to list on the Main Board of the Hong Kong Stock Exchange on February 4, 2026. It plans to offer a total of 30 million shares globally, with a maximum potential fundraising amount of approximately HK$1.26 billion.

As a Chinese supplier with business spanning new chemical materials and healthcare industries, GON Technology has demonstrated unique industrial integration capabilities and growth resilience through its vertically integrated layout from upstream green petrochemicals to midstream polymer materials in the "big chemical" sector, and its industrial chain extension from gelatin raw materials to end products in the "big healthcare" sector. Nevertheless, the market has raised concerns about its profit volatility, raw material price risks and the sustainability of synergies between its two business segments.

Core Highlights: Vertically Integrated Dual-Core Business Layout

Big Chemical Sector: The core strength of GON Technology lies in its in-depth cultivation and strategic expansion in China's new chemical materials sector. Based on its organic polymer modification business, the Company has successfully expanded into upstream key raw material production. According to a Frost & Sullivan report, in terms of 2024 sales revenue, GON Technology ranks as China's second-largest enterprise in organic polymer modified materials and composite materials. More strategically, through self-built production capacity, it has become China's largest polystyrene (PS) manufacturer by production volume. This vertical integration capability—from key intermediates (such as styrene and polystyrene) to high-performance modified materials—has enabled the Company to build competitive advantages in cost control, supply stability and customer synergy. Its products are widely used in downstream industries including automotive, new energy and home appliances.

Big Healthcare Sector: GON Technology successfully entered the gelatin and collagen industry by acquiring Dongbao Biotechnology, a company with decades of industry experience. In this traditional sector, the Company has also established a leading position: in terms of 2024 output, it ranks second in China's bone gelatin market and first among domestic brands, while also being the second-largest empty capsule manufacturer among domestic brands. The Company is promoting the transformation of this sector from a raw material supplier to a comprehensive service provider of "collagen+" end products, seeking to create new growth drivers in the healthcare industry.

The Company's "chemicals + healthcare" dual-core business model aims to balance the risks of cyclical and consumer industries while exploring innovative opportunities in cross-cutting fields such as bio-based materials. However, the two sectors differ significantly in technology, markets and customer bases, and the real synergistic effects remain to be verified. Currently, growth is mainly driven by the chemical sector, with the revenue share of the healthcare sector showing a downward trend.

Financial Performance: Steady Revenue Growth with Prominent Profit Volatility

GON Technology's financial data reflects the typical characteristics of an industrial enterprise: substantial revenue scale, yet profit significantly affected by costs, R&D investments and non-recurring gains.

Steady double-digit revenue growth: The Company's revenue increased from RMB 13.406 billion in fiscal year 2022 to RMB 19.188 billion in fiscal year 2024, representing a steady CAGR of 19.6%. Revenue for the first ten months of fiscal year 2025 reached RMB 17.444 billion, a year-on-year increase of 10.0%. This growth was mainly driven by increased sales volume from the commissioning of green petrochemical new materials (polystyrene, polypropylene, etc.) production capacity, as well as overall gross margin improvement.

Significant profit volatility, reliance on non-operational factors: The Company's profit performance has fluctuated considerably. Annual profit decreased by 25.5% from RMB 724 million in fiscal year 2022 to RMB 540 million in fiscal year 2023, mainly due to a substantial increase in R&D expenses. It then rebounded to RMB 721 million in fiscal year 2024, a year-on-year increase of 33.5%, but this was largely driven by non-recurring items such as bargain purchase gains from acquisitions (RMB 168 million) and tax incentives. Profit for the first ten months of fiscal year 2025 stood at RMB 721 million, a year-on-year increase of 32.5%, mainly attributed to revenue growth. Excluding non-recurring gains, the Company's core profit growth has not been as stable as its revenue growth.

Gross margin pressure, high R&D investment: The Company's gross margin level is relatively low and volatile, standing at approximately 11.8%, 9.2% and 8.3% from fiscal year 2022 to 2024 respectively. This is mainly affected by fluctuations in bulk raw material prices and competitive pricing strategies in mature downstream industries such as home appliances. Meanwhile, the Company continues to make substantial R&D investments, with R&D costs reaching RMB 591 million in fiscal year 2024, accounting for 3.1% of revenue. While this puts pressure on short-term profits, it also lays the foundation for building long-term technological barriers.

IPO Details: Cornerstone Investor Backing, Fundraising to Deepen Core Business Layout

GON Technology plans to offer 30 million shares globally in this H-share offering, with an offer price of HK$34—HK$42. Each trading lot is set at 200 shares, with an entry cost of HK$8,484.71. The Company plans to close the public offering on January 30 and list on February 4. The net proceeds from the offering will be mainly used to expand production lines, upgrade production technology and supplement working capital, aiming to further consolidate its production capacity advantages and technical strength in the new chemical materials sector.

In addition, according to the prospectus, the Company has successfully secured 8 cornerstone investors for this offering, with a total subscription amount of US$41 million (approximately HK$320 million). Based on the midpoint of the offer price range (HK$38), the cornerstone investors will subscribe for approximately 8.4024 million shares, accounting for about 28.0% of the global offering shares.

Risk Factors: Cyclical Volatility, Cost Pressures and Integration Challenges

Raw material price volatility and cost pass-through risks: Raw materials account for over 90% of the Company's cost of sales. Prices of major raw materials such as resins and bone particles are significantly affected by crude oil market fluctuations and supply-demand dynamics. Between 2020 and 2022, the Company experienced pressure from rapidly rising raw material prices. Although it attempts to pass on costs to customers, its pricing power is constrained in downstream mature industries with fierce competition such as home appliances, making gross margin directly vulnerable to raw material price volatility.

Profit quality and goodwill impairment risks: As mentioned earlier, the Company's profit is highly dependent on non-recurring gains, and the stability and growth of its core operating profitability need to be strengthened. In addition, the Company has goodwill of approximately RMB 332 million and intangible assets of RMB 360 million on its books arising from acquisitions. In fiscal year 2024 and the first ten months of fiscal year 2025, it recorded a total of approximately RMB 17.6 million and RMB 21.5 million in impairment losses on goodwill and intangible assets respectively, due to the healthcare sector failing to meet performance expectations. Sustained underperformance of the healthcare business or deterioration in market conditions may trigger further impairments, directly impacting net profit.

Accounts receivable and controlling shareholder equity pledge risks: As of October 31, 2025, the Company's trade receivables and notes receivable reached RMB 3.526 billion, with a turnover period of approximately 61 days. The large scale of accounts receivable will increase the risk of bad debts and capital turnover pressure during economic downturns. Furthermore, one of the controlling shareholders, Mr. Wang, has pledged 11.99% of the Company's issued share capital for financing purposes. Forced liquidation of these pledged shares could lead to unstable corporate control and trigger stock price volatility.

Conclusion

GON Technology's Hong Kong listing represents a typical path for a Chinese manufacturing enterprise to seek breakthroughs and growth through vertical integration and cross-sector acquisitions. Its leading position and production scale in the new chemical materials sector form a solid foundation, while the healthcare sector offers potential for brand value enhancement and transformation.

For investors, this offering presents an opportunity to participate in China's high-end manufacturing and materials industry upgrading. However, it is crucial to recognize the industry's cyclical nature, cost pressures and the complexity of business integration. Stable cornerstone investor subscriptions and relatively reasonable valuation provide a certain margin of safety, but the Company's profit volatility demands stronger risk identification capabilities from investors. After listing, the key to gaining long-term market recognition will lie in the Company's ability to effectively smooth profit fluctuations, truly achieve dual-core business synergies and improve capital efficiency.

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