Red Avenue New Materials Group Co., Ltd. (603650.SH) has submitted a second listing application to the Hong Kong Stock Exchange, with Guotai Haitong/Haitong International serving as the sole sponsor. The company previously filed its initial application on February 8. Headquartered in China, this integrated advanced chemical materials provider is seeking a main board listing.

The company operates as a comprehensive new materials service supplier focused on advanced chemical products, encompassing research, development, production, marketing, sales, and distribution. Its business spans three main segments: rubber additives for tires and other chemical products, electronic materials, and fully biodegradable materials. According to Frost & Sullivan, Red Avenue ranked first globally and in China by sales value in the tire phenolic resin rubber additives market in fiscal 2025, commanding market shares of 41.4% and 45.9%, respectively.

In the electronic materials sector, the company secured the top position among domestic suppliers in China's semiconductor photoresist market and TFT array photoresist market during fiscal 2025, with market shares of 5.8% and 26.2%, respectively. Its tire rubber additives and chemical products division primarily delivers rubber resins and additives including phenolic resins, PTBP, and other chemicals used to enhance tire and rubber product properties such as adhesion, strength, and safety.

The electronic materials supply chain covers semiconductor materials—such as photoresists, CMP polishing pads, high-purity solvents, and EBR—along with display panel materials including photoresists, organic insulating films, and luminescent materials. These products serve downstream semiconductor and display panel manufacturers. Meanwhile, the biodegradable materials segment focuses on PBAT products used in packaging and agricultural mulch films.

Positioned in the midstream of the industrial chain, the company supplies functional resins, photoresists, and auxiliary chemicals to tire, automotive, semiconductor, and display panel producers. Its principal raw materials include phenol, formaldehyde, resins, and solvents. Beyond procuring raw materials from suppliers, the company pursues upstream integration by producing key raw materials and intermediates internally, ensuring supply stability, enhancing cost control capabilities, and strengthening its comprehensive supply service offerings to downstream clients.

As of the latest practicable date, Red Avenue operates seven production facilities: Red Avenue Chemical Plant, Huaqi Plant, Red Avenue Zhenjiang Plant, Red Avenue Electronics Plant, Hubei Beixu Plant, Kehua Plant, and Red Avenue Changzhou Plant. The company continues investing in capacity expansion through new facility construction and upgrades to existing production lines. Looking ahead, Red Avenue is establishing a new rubber additives production base in Thailand to bolster global supply capacity and sustain business growth.

Financial performance

Revenue for fiscal 2023, 2024, 2025, and the first half of 2026 reached approximately RMB 2.937 billion, RMB 3.263 billion, RMB 3.421 billion, and RMB 2.133 billion, respectively. Net profit for the corresponding periods amounted to approximately RMB 404 million, RMB 534 million, RMB 577 million, and RMB 389 million.

Industry landscape

China has emerged as one of the world's largest semiconductor consumption markets, with downstream applications spanning consumer electronics, communications, automotive electronics, and artificial intelligence. Driven by demand and national policy support, the domestic chip manufacturing sector is expanding rapidly. China's integrated circuit industry market size grew from RMB 1.0 trillion in 2021 to RMB 1.4 trillion in 2025, reflecting a compound annual growth rate of 8.2%. This trajectory is projected to continue, reaching RMB 2.1 trillion by 2030 with an 8.0% CAGR from 2025 to 2030.

In the global semiconductor photoresist market, ArF photoresist sales increased from US$1.2 billion in 2021 to US$1.4 billion in 2025, with expectations of reaching US$2.1 billion by 2030 at a 9.3% CAGR. KrF photoresist sales grew from US$700 million to US$900 million over the same period (6.5% CAGR), projected to hit US$1.3 billion by 2030. EUV photoresist sales rose from US$200 million to US$300 million between 2021 and 2025, with an anticipated surge to US$900 million by 2030, representing a robust 22.9% CAGR. G/I line and other photoresist sales expanded from US$500 million to US$600 million, forecasted to reach US$700 million by 2030.

Within China's semiconductor photoresist market, ArF photoresist sales grew from RMB 1.5 billion in 2021 to RMB 3.5 billion in 2025 (23.6% CAGR), expected to reach RMB 7.1 billion by 2030 at a 15.2% CAGR. KrF photoresist sales climbed from RMB 1.4 billion to RMB 2.4 billion (14.4% CAGR), projected to reach RMB 4.4 billion by 2030. G/I line and other photoresist sales rose from RMB 700 million to RMB 1.1 billion (12.0% CAGR), with forecasts of RMB 1.6 billion by 2030.

Corporate governance and shareholding

The board comprises five executive directors, one non-executive director, and four independent non-executive directors. Ms. Zhang Ning, along with her controlled entities Red Avenue Investment and Virgin Holdings, serves as the controlling shareholder. Virgin Holdings is held 99.9% by Ms. Zhang and 0.1% by Red Avenue Investment. Under the Securities and Futures Ordinance, Ms. Zhang is deemed to hold interests in the shares held by Virgin Holdings.

Advisory team

Haitong International Capital Limited acts as the sole sponsor. Company legal advisors include Chiu & Partners, AllBright Law Offices, and Stephen Peepels. Sponsor legal counsel is provided by Han Kun Law Offices LLP and Beijing Dacheng (Shanghai) Law Offices. Ernst & Young serves as auditor and reporting accountant, with Frost & Sullivan (Beijing) Consulting Co., Ltd. Shanghai Branch as industry consultant.