Delton Technology (Guangzhou) Inc. Announces Final Offer Price and Allotment Results for HK IPO

Summary of Key Developments

Delton Technology (Guangzhou) Inc. has successfully completed its Global Offering of H Shares, paving the way for its debut on the Hong Kong Stock Exchange on March 20, 2026. With overwhelming demand from both the Hong Kong public and international institutional investors, the company has announced important details that current and prospective shareholders must understand, as these developments may significantly influence the company’s trading debut and subsequent share price.

Key Points from the Offering

• Stock Code: 1989
• Final Offer Price: HK\$71.88 per H Share
• Total Number of H Shares Offered: 46,000,000
• Hong Kong Public Offering: 4,600,000 H Shares (10% of total)
• International Offering: 41,400,000 H Shares (90% of total)
• Total Issued Shares on Listing: 472,446,482
• Gross Proceeds Raised: HK\$3,306.48 million
• Net Proceeds After Expenses: HK\$3,185.26 million
• No Over-Allotment Option or Stabilization Activities: Noted
• Listing Date: March 20, 2026

Investor Demand and Allotment Results

Hong Kong Public Offering

• Valid Applications: 202,417
• Successful Applications: 39,425
• Subscription Level: 1,070.72 times (massive oversubscription)
• No Claw-back Triggered, No Reallocation from International Tranche

International Offering

• No. of Placees: 162
• Subscription Level: 14.64 times (very strong institutional demand)
• Shares Allocated to Cornerstone Investors: 20,674,500 H Shares (44.94% of International Offering, 4.38% of total share capital post-listing)

Cornerstone Investors and Lock-up Arrangements

Several high-profile cornerstone investors participated, including China Pinnacle Equity Management (CPE), Greenwoods, UBS AM Singapore, Value Partners, Eastspring, Greater Bay Area Development Fund Management, MY Asian Opportunities Master Fund, Baring Asset Management, Dajia Life, and ICBC Wealth Management. These cornerstone investors are subject to a 6-month lock-up period ending September 19, 2026, which is a significant point as the release of these shares post-lock-up could impact share price liquidity and volatility.

Key Lock-up Arrangements

• Controlling Shareholders: Zhenyun Investment (36.22%), Guangcai Investment (6.10%), Guangsheng Investment (6.10%) all subject to lock-up until March 19, 2027.
• Cornerstone Investors: 20,674,500 H Shares (4.38% of issued share capital) locked up until September 19, 2026.

Concentration and Public Float Issues

• Top 1 Placee: 3,808,600 H Shares (0.81% of issued share capital post-listing)
• Top 25 Placees: 33,902,200 H Shares (7.18% of issued share capital)
• Free Float: 25,325,500 H Shares (HK\$1,820.40 million market cap) will not be subject to disposal restrictions, comfortably exceeding the HK\$600 million free float requirement.
• Public Float: Expected value approx. HK\$3.31 billion, above the HK\$3 billion threshold mandated by the HKEX.

Special Allocations: Waivers and Connected Clients

The offering involved several waivers and consents from the Hong Kong Stock Exchange, allowing certain existing minority shareholders, cornerstone investors, and connected clients to participate in the International Offering. These include:

• Waivers for existing minority shareholders holding less than 5% prior to the IPO to participate in the International Offering.
• Consent for certain cornerstone investors and their close associates to receive additional H Shares as placees.
• Participation of connected clients (such as subsidiaries or affiliates of joint global coordinators) under stringent conditions to ensure no preferential treatment and full disclosure of ultimate beneficial owners.

Complex Total Return Swap (TRS) and OTC Derivatives Arrangements

Several institutional placees, particularly those based in mainland China, utilize back-to-back TRS or OTC derivative structures to gain economic exposure to the H Shares. These arrangements are compliant with PRC regulations and Hong Kong listing requirements but mean that some shares are held by intermediaries on behalf of ultimate beneficial owners, potentially impacting shareholding transparency and future market liquidity.

Risks and Price Sensitive Information for Investors

• Lock-up Expiry: The release of cornerstone and controlling shareholder lock-ups in September 2026 and March 2027, respectively, may result in increased share supply and price pressure around these dates.
• High Concentration: Significant allocation to cornerstone and large institutional investors means trading could be less liquid initially, with the top 10 placees holding over 5% of issued share capital post-listing.
• No Stabilization Mechanism: Absence of an over-allotment option or stabilization activities could lead to higher price volatility after listing.
• Regulatory Waivers: The use of waivers and consents for share allocation, as well as the participation of connected clients, introduces complexity and could lead to regulatory scrutiny or changes in market perception.
• Derivatives and Swap Exposures: The use of TRS and OTC derivatives means that economic interest in shares may shift rapidly, depending on the decisions of the ultimate beneficial owners, which could create short-term volatility.

Key Dates and Trading Arrangements

• Commencement of Trading: 9:00 a.m. on Friday, March 20, 2026 (Hong Kong time).
• Board Lot Size: 100 H Shares.
• H Share Certificates Valid From: 8:00 a.m. on March 20, 2026.

Potential Share Price Catalysts

• Demand/Supply Dynamics: Massive oversubscription and high-quality cornerstone investors point to strong initial demand, which could support the share price at debut.
• Lock-up Expiries: Monitor September 2026 and March 2027 for potential increase in share supply.
• Shareholder Concentration: Initial liquidity could be affected by high concentration among a handful of institutional investors.
• Connected Client Participation: Offers transparency but could raise questions among minority shareholders about future trading patterns and influence.

Conclusion

Delton Technology’s IPO has attracted robust demand from both public and institutional investors, with strong backing from major cornerstone investors. The complex share allocation, lock-up arrangements, and use of derivative structures introduce both opportunities and risks for investors. All these factors are crucial for shareholders to monitor, especially as they may influence share price movements around the listing date and at the expiry of lock-up periods.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult with professional advisors before making any investment decisions. The information provided is based on the official announcement and may be subject to change.

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