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Suzhou Kema Materials Technology Co., Ltd. (hereinafter referred to as "Kema Technology," stock code: 301611) was officially listed on the Shenzhen Stock Exchange's ChiNext board on August 16, 2024. Kema Technology's main business includes the research and development, manufacturing, sales, and service of advanced ceramic materials and components, as well as surface treatment services for general semiconductor equipment. The company is a leading player in the domestic semiconductor advanced ceramics and components sector, and a leader in the domestic display panel surface treatment industry.

Kema Technology's public offering involves 75 million new shares, priced at 8.00 RMB per share. After the offering, the total share capital will reach 436 million shares, with the public offering accounting for 17.20% of the post-offering total share capital. The funds raised from this offering will be used for projects related to advanced materials production bases, core semiconductor component processing and manufacturing, research and development center construction, and to supplement working capital.

Ceramic materials, alongside metals and polymers, are considered one of the "three major solid materials" of modern times. Compared to conventional ceramics, advanced ceramics employ higher technical standards in raw materials, manufacturing processes, and precision finishing, resulting in superior physical, chemical, and biological properties. These enhanced characteristics make advanced ceramics a critical foundational material in several key sectors of the national economy. The development of global advanced ceramics has a long history, with research, development, and industrial production spanning over 100 years.

According to data from Frost & Sullivan, the global advanced ceramics market reached 381.8 billion RMB in 2021, with advanced structural ceramics accounting for 106.7 billion RMB, or 28% of the total market. The global market for advanced structural ceramics is expected to grow at a compound annual growth rate (CAGR) of 4% from 2022 to 2026. China's advanced ceramics market started relatively late, with the domestic substitution rate for advanced structural ceramics at only about 5% in 2015. By 2021, this rate had increased to approximately 20%, and many key component products in the industry have seen varying degrees of domestic substitution. The market potential for local enterprises is expected to continue expanding in the future.

Kema Technology is a leading domestic enterprise in the field of advanced ceramic materials and components for semiconductor equipment. The company masters the entire process technology, from material formulation to component manufacturing, for advanced ceramics used in semiconductor equipment. Kema Technology has achieved varying degrees of domestic substitution for critical "bottleneck" products, including high-purity alumina and high thermal conductivity aluminum nitride components for semiconductor equipment, as well as classifier wheels for grading machines. Several key indicators have reached or are close to the mainstream levels of global competitors. The company has become one of the few domestic enterprises to achieve overseas scale sales of advanced semiconductor ceramic materials, entering the supply chains of globally renowned semiconductor equipment manufacturers. Kema Technology has also established stable and in-depth cooperative relationships with leading domestic semiconductor equipment companies such as North Huachuang, CMEC, and Tuojing Technology.

At the same time, Kema Technology possesses the capability for surface treatment of a variety of components made from base materials such as alumina, aluminum nitride, yttrium oxide, and other ceramics and metal materials. The company’s surface treatment services have already secured a certain market position in the etching equipment for display panels. Kema Technology is actively expanding this business into display panel CVD equipment and the semiconductor sector, with the potential to become a new growth driver in the future. According to data from Frost & Sullivan, in 2021, Kema Technology held a market share of approximately 72% among domestic suppliers of advanced structural ceramics for semiconductor equipment in mainland China, accounting for about 14% of the total procurement scale of advanced structural ceramics for domestic semiconductor equipment in China.

With the stable growth in demand from the downstream general semiconductor equipment market and the acceleration of domestic substitution for key components, Kema Technology has continuously expanded its business scale with market-recognized and competitive products and services.

According to the prospectus, from 2021 to 2023, Kema Technology achieved operating revenues of 345.02 million RMB, 462.47 million RMB, and 480.45 million RMB, respectively, with net profits attributable to the parent company of 67.09 million RMB, 93.24 million RMB, and 81.86 million RMB. The compound annual growth rates (CAGR) of revenue and net profit attributable to the parent company were 18.01% and 10.46%, respectively, showing consistent and stable growth. In terms of profitability, Kema Technology maintained a gross margin of its main business at 43.02%, 42.18%, and 39.67% from 2021 to 2023, with a stable level around 40%, positioning the company at a high level within the industry and demonstrating strong profitability.

To continuously enhance the core competitiveness of its products and services, the company has been increasing its R&D investment. The R&D expense ratio increased from 5.82% in 2021 to 9.69% in 2023. Kema Technology is also undertaking several significant research projects, including the "Key Technologies and Industrialization of Ceramic Heating Discs for PECVD Equipment" under the national "Large-Scale Integrated Circuit Manufacturing Equipment and Complete Technology" program ("02 Special Project"). The company is further expanding into higher-value-added module products, focusing on breakthroughs in critical "bottleneck" products. In the first half of 2024, Kema Technology achieved operating revenue of 384.53 million RMB, representing a year-on-year growth of 64.27%, and net profit attributable to the parent company of 139.14 million RMB, reflecting a year-on-year growth of 308.89%. The company’s performance continues to maintain a strong growth momentum.

Through this IPO, Kema Technology plans to allocate the raised funds toward the construction of an advanced materials production base, a general semiconductor core component manufacturing project, and an R&D center development project.

The advanced materials production base project is expected to gradually establish mature production lines covering ceramic products such as alumina, zirconia, silicon carbide, aluminum nitride, silicon nitride, yttria, and titania. Upon completion, the general semiconductor core component manufacturing project will have an annual processing capacity of 50,000 new semiconductor-related components made from advanced ceramics, quartz, and metal, as well as an anodization capacity of 200,000 semiconductor equipment components. The R&D center project will introduce dedicated research facilities for ceramic heaters, electrostatic chucks, ultra-high-purity silicon carbide, and sintered silicon carbide. Additionally, a materials testing center will be established to support research in new materials and composite materials.

The implementation of these investment projects will facilitate the technological advancement and iteration of Kema Technology’s advanced materials, further improving production line efficiency while expanding semiconductor component processing and anodization capacities to diversify its product offerings. Kema Technology stated that it aims to seize the strategic opportunities presented by the rapid development of the general semiconductor industry. By closely following industry trends and continuously strengthening its technological capabilities through independent and collaborative research, the company seeks to overcome technical bottlenecks in mid-to-high-end products, accelerate the domestic substitution of advanced ceramics, consolidate its competitive advantage, enhance its market position, and strive to become a world-class provider of advanced ceramics and surface treatment services.