Kangda, AllBright act on Luoyang Bearing’s RMB2bn ChiNext IPO

Chinese bearing manufacturer Luoyang Bearing Group debuted on the SZSE ChiNext board on 9 September, raising around RMB1.97 billion (USD293.5 million). Kangda Law Firm and AllBright Law Offices provided legal support for the transaction.

Luoyang Bearing issued 124 million shares at RMB15.88 each. The shares opened at RMB30 on the first day of trading, around 88.9% above the issue price, giving the company a market capitalisation of more than RMB20 billion.

The IPO brought in 19 strategic placement investors, including China Shipbuilding Group Investment, Dongfeng Asset Management and Anpeng Sci-Tech Automotive Industry Investment Fund. China Securities acted as the sponsor.

Kangda counselled Luoyang Bearing, with partner Qiao Jiaping leading the team and partners Ma Yufeng, Jiang Hua and Miao Ding acting as handling lawyers. AllBright advised the sponsor, with partner Shen Guoquan leading the team.

Headquartered in Luoyang, Henan province, the company was established in 2004 and traces its roots to Luoyang Bearing Factory, founded in 1954. The company develops, manufactures and sells bearings and related components used in sectors spanning wind power, rail transport, aerospace, and defence and new-energy vehicles. Its major customers include China State Railway Group, China State Shipbuilding Corporation and BYD.

The prospectus stated that the IPO proceeds would mainly be used to develop and apply high-speed train bogie bearings, build intelligent production capacity for new-energy bearings, upgrade precision-bearing production for major technical equipment and commercialise high-end precision small slewing bearings, as well as repay bank loans.