Core Insights - The coal-fired flue gas pressure swing adsorption carbon capture technology developed by the Beijing Low Carbon Clean Energy Research Institute and Zhejiang Electric Power Company has been recognized as internationally leading by the China Coal Industry Association [1] - This technology utilizes solid adsorbent materials to selectively adsorb and efficiently concentrate carbon dioxide from flue gas, featuring low energy consumption, quick start-stop capabilities, stable operation, no secondary pollution, and full electric drive [1] Group 1 - The technology was initiated in October 2021, focusing on the development and demonstration of key carbon capture technologies tailored for coal-fired flue gas characteristics [1] - A comprehensive research approach was adopted, including the development of high-performance adsorbents and low-energy capture processes, culminating in a complete technology demonstration at a scale of 10,000 tons [1] Group 2 - In December 2024, the first industrial demonstration unit for low-pressure adsorption carbon capture was completed, marking a significant milestone in the industry [2] - The demonstration unit achieved a capture energy consumption of 331 kWh per ton of carbon dioxide under non-optimal conditions, laying the groundwork for future 100,000-ton scale projects [2] - The Low Carbon Institute's CCUS center is focusing on cutting-edge technologies in carbon capture and utilization, with plans for further scaling and demonstration of adsorption carbon capture technology in the Zhejiang region [2]

Core Viewpoint - Shougang Longze has delayed its Hong Kong IPO due to ongoing disputes related to its joint venture, impacting its global offering and listing timeline [2][5][6] Group 1: IPO Delay - Shougang Longze announced a further delay in its Hong Kong IPO, which was initially scheduled for July 14, with listing on July 15 [2] - The delay is attributed to a lawsuit initiated by Hainan Jiyuan Junyi, which has raised concerns regarding investment returns and governance issues within the joint venture [5][6] Group 2: Legal Disputes - The lawsuit claims that Shougang Longze unlawfully increased the investment in the joint venture without approval and set product prices without board consent, allegedly violating Chinese corporate law [6] - Shougang Longze asserts that the claims lack legal basis and intends to actively respond to the lawsuit [6] Group 3: Company Overview - Established in 2011, Shougang Longze focuses on carbon capture, utilization, and storage (CCUS), primarily generating revenue from low-carbon product sales and comprehensive solutions for industrial clients [7] - The company's financial performance has been volatile, with revenues of RMB 390 million, RMB 593 million, and RMB 564 million for 2022, 2023, and 2024 respectively, alongside increasing losses [7][8] Group 4: Revenue Breakdown - In 2024, Shougang Longze's revenue from product sales was RMB 537 million, accounting for 95.3% of total revenue, while comprehensive solutions contributed RMB 26 million, or 4.7% [7][8] - The company has a high dependency on major clients, with revenue from the top five clients representing 82.1%, 86.0%, and 78.9% of total revenue in the respective years [8] Group 5: Shareholding Structure - Prior to the IPO, Shougang Group held approximately 26.54% of Shougang Longze's issued share capital, with other significant shareholders including Shanghai Mingda Industrial and NZ Tang Ming [9]

Group 1 - The company, Shougang Longze, plans to conduct an IPO from June 30 to July 4, 2025, offering 20.1598 million H-shares, with 10% allocated for Hong Kong and 90% for international sales, at a price not exceeding HKD 18.88 per share and not lower than HKD 14.50 per share [1] - The company specializes in the Carbon Capture, Utilization, and Storage (CCUS) industry, focusing on producing low-carbon products such as ethanol and microbial protein through carbon capture and utilization technology [1] - Since its establishment in 2011, the company has made significant breakthroughs in applying its proprietary synthetic biology technology for industrial production, including the world's first industrial facility that uses carbon-containing industrial waste gas from steel and ferroalloy plants for fermentation to produce ethanol and microbial protein [1] Group 2 - The company's revenue grew rapidly, increasing by 52.1% from RMB 389.5 million in 2022 to RMB 593 million in 2023, but then decreased by 4.9% to RMB 564 million in 2024 [2] - The company reported losses of RMB 23.9 million, RMB 110 million, and RMB 246 million for the years ending December 31, 2022, 2023, and 2024, respectively [2] - The company's EBITDA (non-IFRS measure) for the years ending December 31, 2022, 2023, and 2024 were RMB 33.1 million, RMB 14.2 million, and -RMB 82.5 million, respectively [2] Group 3 - The company intends to use the net proceeds of HKD 284 million from the IPO for various purposes, including approximately 37.9% for developing SAF production facilities in Baotou, Inner Mongolia, and 21.2% for the second phase of production facilities in Hebei [3] - About 11.4% of the proceeds will be allocated for R&D of strains, production equipment, and smart production management systems to enhance production efficiency, while 14.1% will be used for technological upgrades of four production facilities [3] - The remaining proceeds will be used for new product development (5.3%) and general corporate purposes and working capital needs (10.0%) [3]

Core Viewpoint - Beijing Shougang Longze Technology Co., Ltd. (Shougang Longze) is focused on the carbon capture, utilization, and storage (CCUS) industry, aiming to produce low-carbon products through innovative technologies and provide comprehensive low-carbon solutions [3]. Company Overview - Shougang Longze is the only company in the global CCUS industry that has commercialized and scaled the production of low-carbon products using verified synthetic biology technology [3]. - The company has achieved significant innovations, including the world's first industrial facility that uses carbon-rich industrial waste gas from steel and ferroalloy plants to produce ethanol and microbial protein through fermentation [3]. - The company's ethanol can be used as fuel and as a raw material for products like perfumes, sportswear, detergents, and packaging materials, while its microbial protein is the first novel feed protein raw material in China [3]. Business Model - The primary revenue sources for the company include the sale of ethanol, microbial protein, and by-products such as biogas and crude alcohol, along with providing low-carbon comprehensive solutions to industrial clients [3]. Production Capacity - Shougang Longze operates four production facilities across three provinces in China, with a total annual production capacity of 210,000 tons of ethanol and 23,200 tons of microbial protein [3]. Market Opportunity - The global CCUS industry is projected to grow from an annual investment of $12.6 billion in 2023 to $76.8 billion by 2028, reflecting a compound annual growth rate (CAGR) of 43.5% [4]. - In China, the CCUS industry investment is expected to increase from RMB 21.6 billion in 2023 to RMB 99.3 billion by 2028, with a CAGR of 35.7% [4]. Customer Dependency - The company has a high dependency on a few major clients, with revenue from the top five clients accounting for 82.1%, 86.0%, and 78.9% of total revenue in the respective years [4]. - The largest client contributed 37.5%, 46.5%, and 26.3% to total revenue in the respective years [4]. Financial Performance - The company's revenue for the fiscal years 2022, 2023, and 2024 is approximately RMB 389.5 million, RMB 592.6 million, and RMB 563.6 million, respectively [5]. - The net losses for the same periods are RMB 23.9 million, RMB 110.1 million, and RMB 245.6 million, respectively [5].