Intron Technology Holdings Limited Announces Details of Proposed Listing on the Main Board of The Stock Exchange of Hong Kong Limited

Investment Highlights - Intron Technology is a fast-growing automotive electronics solutions provider in China, which focuses on providing comphresenive solutions targeting critical automotive electronic components applied in new energy, body control, safety and powertrain systems with high entry barrier

- Intron Technology achieved great development in the New Energy Vehicle segment through its strategic focus on the PRC domestic OEMs. The Group's customers include eight of the top ten Chinese new energy passenger vehicle brands in 2017 . These OEMs included BYD and BAIC BJEV, with whom it has more than 12 and four years of business relationships, respectively. With a diversified customer base, it served 956 customers in 2017

- Automotive vehicle production volume in China is expected to grow at a CAGR of 6.5% from 2017 to 2022, while the production volume of new energy vehicle in China is expected to grow at a higher rate at a CAGR of 34.9%, accounting for approximately 59.4% of the global output, according to Frost & Sullivan

- Sound financial performance with 2017 revenue reaching HK$1,473.5 million, up by 28.1% year-on-year and net profit at HK$122.4 million, up by 30.2% year-on-year

Offering DetailsIntron Technology intends to offer an aggregate of 250,000,000 shares (the "Offer Shares") under the Global Offering (subject to the over-allotment option), of which 90% will be initially offered as the placing shares (subject to reallocation and the over-allotment option) and the remaining 10% will be initially offered as the Hong Kong offer shares (subject to reallocation). The indicative offer price (the "Offer Price") range is between HK$2.90 and HK$3.33 per Offer Share. Gross proceeds from the Global Offering, assuming an Offer Price of HK$3.12 (being the mid-point of the proposed Offer Price range) and the over-allotment option is not exercised, are estimated at HK$780.0 million.

The Hong Kong public offering will commence at 9:00 a.m. on 29 June 2018 (Friday) and end at 12:00 noon on 5 July 2018 (Thursday). The final offer price and the allotment results will be announced on 11 July 2018 (Wednesday). Dealing of the shares is expected to commence on the Main Board of the SEHK on 12 July 2018 (Thursday) under the stock code 1760. The shares will be traded in board lots of 1,000 shares each.

BNP Paribas Securities (Asia) Limited is the sole sponsor, sole global coordinator, sole bookrunner and sole lead manager in the Global Offering.

Investment Highlights

Fast-growing automotive electronics solutions provider focusing on critical automotive electronic componentsSince establishment in 2001, Intron Technology has been focused on servicing the automotive industry in China. The Group considers it to be a "technology enabler" by providing value-added solutions targeting critical automotive electronic components to help its customers including OEMs and their suppliers to achieve industry-leading performance, which is crucial amid the stringent regulatory requirements and increasing consumers' demand for smart features in vehicles. The Group believes its customers benefit from its "ready-to-use" and "ready-for-mass-production" solutions which help them shorten their system and components development cycle and improve cost efficiency in a highly competitive automotive market. As a result, it believes it is a preferred partner of the China's domestic OEMs and their suppliers to capture the substantial growth potential in the automotive industry in China.

During the Track Record Period, Intron Technology recorded continued growth in revenue, gross profit and net profit that outperformed the overall industry growth. Benefiting from strong research and development capabilities and engineering expertise, the Group believes that it is well positioned to continue capture the growth in automotive electronic content, new energy vehicles and automated driving.

Comprehensive portfolio of automotive electronics solutions with high entry barriersIntron Technology has accumulated a wealth of experience in providing automotive electronics solutions to customers and built a portfolio that covers three major categories of automotive electronic components ranging from body control, safety and powertrain as well as for new energy vehicles.

In 2017, the Group provided 158 solutions to customers, up from 144 in 2015. Built on its understanding of automotive electronics technologies, its comprehensive solution portfolio differentiates it from other automotive electronic solution suppliers in the market that tend to operate in smaller scale. This, together with long co-operative history with OEMs and their suppliers, create high entry barriers for potential competitors.

Strategic focus on renowned PRC domestic OEMsIntron Technology strategically focuses on servicing OEMs in China and their suppliers whom it believes are in greater needs for solutions that help them achieve the desired functions and features on par with international OEMs. With its long history in the industry, the Group has established strong relationships with many of the China's leading OEMs, either as direct customers or as users of its solutions purchased through their automotive part suppliers. During the Track Record Period, the Group's customers included eight of the top ten Chinese new energy passenger vehicle brands in 2017. These OEMs included BYD and BAIC BJEV, with whom the Group has more than 12 and four years of business relationships, respectively.

The Group has established branch offices in Shenzhen and Beijing where its major customers such as BYD and BAIC BJEV are located. Its presence has now expanded into 14 major cities in the Greater China Region including Shanghai, Beijing, Chongqing, Xi'an, Changchun, Guangzhou and Shenzhen, which is strategically planned to allow the Group to maintain close proximity to the locations of OEMs and their suppliers. Based on its targeted marketing efforts, it has managed to expand its customer base, with the number of customers increasing from 672 in 2015 to 956 in 2017.

Strong research and development capabilities and pipelineIntron Technology has a large and growing professional team dedicated to research and development. As at 31 December 2017, its R&D team comprised 230 members. It was the registered owner of a total of 43 granted patents and 69 software copyrights and had filed 21 pending patent applications in the PRC as at 19 June 2018, the Latest Practicable Date.

The Group believes its success was partly attributable to its research and development team's efforts spent in constantly keeping themselves abreast of the latest market trends in the automotive industry and their ability to identify potential opportunities as they arise in the market. In 2015, 2016 and 2017, the Group's R&D costs amounted to RMB30.6million, RMB52.8 million and RMB74.7 million, respectively, representing 4.2%, 4.6% and 5.1% of its total revenue. Its dedication to and significant investments in R&D not only result in new solutions, but also help keep it at the technological forefront of the automotive electronic component industry.

Experienced and visionary management team with extensive knowledge of the automotive electronics industryThe Group's dedicated management team, with an average of more than 18 years of experience in the automotive industry or electronic components industry, is led by Mr Luk Wing Ming, co-founder, Chairman and co-CEO and Mr Chan Cheung Ngai, co-founder and co-CEO, who both have over 20 years of working experience in the electronics industry including 16 years in the automotive electronics industry. Under the leadership, strategic vision and direction of the executive directors and senior management team, Intron Technology has built a business with a proven track record of success.

Future StrategiesSince the new energy vehicles market in China is expected to continue its rapid growth in the coming years, the Group plans to further increase its investment in the research and development in the area of new energy, and in particular developing advanced solutions targeted at the following areas which it believes are the key applications in new energy vehicles, including battery management system (BMS), vehicle control units (VCU) and motor control units (MCU).

The Group also plans to further enhance its research and development capabilities through expanding its R&D team by recruiting additional engineers and staff, where its core competencies are laid. Moreover, it plans to continuously increase its investment in the research and development of a number of key technology platforms, which it believes align with new industry trends.

Intron Technology will also develop modular solutions for design and engineering of diverse applications to increase market coverage, increase investment in solutions used in automated driving, and identify acquisition and strategic alliances opportunities.

Use of ProceedsAssuming the Offer Price is fixed at HK$3.12 per Offer Share, being the mid-point of the indicative range of the Offer Price, and assuming the over-allotment option is not exercised, the gross proceeds would be HK$780.0 million. The net proceeds (after deducting underwriting fees and total expenses) will be used for:

Purposes / ApproximatelyExpand research and development capabilities: 30.0%Ehance research and development infrastructure: 30.0%Finance acquisitions of research and development capabilities: 30.0%Working capital and other general corporate purposes: 10.0%

For the Year Ended 31 December(RMB'000) 2016 2017 YoY changeRevenue 1,150,173 1,473,484 +28.1%Gross Profit 241,387 309,011 +28.0%Profit for the year 93,990 122,379 +30.2%

About Intron Technology Holdings LimitedIntron Technology Holdings Limited is a fast-growing automotive electronics solutions provider in China focuses on providing solutions targeting critical automotive electronic components applied in new energy, body control, safety and powertrain systems. The Group utilizes its research and development and engineering capabilities to provide solutions incorporating advanced semiconductor devices to help OEMs achieve industry leading performance.

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