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Suzhou Jinhong Gas Earned just under 19bn on Trading Debut

2020.06.16 CoStone Capital Views:


On June 16th, 2020, Suzhou Jinhong Gas (688106.SH), one of CoStone’s best portfolio companies, kicked off trading on the Nasdaq-style STAR Market of the Shanghai Stock Exchange (SSE). 

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Mr. Lin Ling, vice president of CoStone, and Mr. Jin Xianghua, president of Jinhong Gas

On June 16th, 2020, Suzhou Jinhong Gas (688106.SH), one of CoStone’s best portfolio companies, kicked off trading on the Nasdaq-style STAR Market of the Shanghai Stock Exchange (SSE). The company raised RMB 18.85bn at a closing price of RMB 38.93/share, a 151.49% increase from the opening RMB 15.48/share. The huge market value on the issue day makes Jinhong leave the other three Chinese gas solutions developers, Kaimeite Gases (002549.SZ), Huate Gas (688268.SH), and Heyuan Gas (002971.SZ) all in the dust.


Suzhou Jinhong Gas Co Ltd, a China-based company, is engaged in the R&D, production, and sales of special gases used in electric semi-conductors. Suzhou Jinhong first broke foreign-invested gas giants’ monopoly of the domestic market with its 7N electronic-grade ultra-pure ammonia in 2010 and headed for the high-end market.

Today’s Jinhong has already been a match of foreign-invested gas giants in the quality of ultra-pure ammonia, high purity hydrogen, high purity nitrous oxide, high purity carbon dioxide, silane mixture, octa-fluoro butane, high purity argon, high purity nitrogen. Jinhong’s ultra-pure ammonia has occupied over 50% of the domestic market. 

Jinhong’s clients cover many well-known electric semi-conductor producers in China.


The year 2019 marks the fortieth anniversary of China’s Reform &Opening-Up, once again, we meet at the turning point of history. What’s the next step for the game, is there any clear guidance? The answer is affirmative.

Our country is enjoying a good momentum of development, which does not come from the Washington Consensus nor the Beijing Consensus. China’s experience has proved that both the visible hand and the invisible hand are crucial: the visible hand, stands for the government-led reform, and would yield benefits for reform and opening up; the invisible hand, stands for the Marginal Power represented by the private sector, and would improve economic efficiency and tax collection, create jobs and employment opportunities.

Provided that we want to protect and expand the benefits form reform, three simple but mandatory agreements are to be made and followed: No.1 Private ownership must be recognized, protected and treated equally with public ownership constitutionally, both ownerships are scared and inviolable;No.2 Make further clarification of the principal position of market economy, “deepen economic system reform by centering on the decisive role of the market in allocating resources”, as President Xi addressed in the third Plenary Session of the 18th CPC Central Committee;No.3 Implement the guiding principles of “comprehensively promoting law-based governance” of the fourth plenum. The rule of law is essential for economic growth, irreplaceable to protect private ownership, and necessary to encourage innovation and entrepreneurship.

Above are three rules for us to avoid falling into the Middle-income Trap. Assuming that we are breaking systematic barriers to private enterprises’ participation in market economy, and boosting innovation and entrepreneurship of our society, then we are heading towards a promoting direction. We are marching in the path of light, regardless of the ups and downs of Sino-US relationship, the drop in GDP growth rate, or the monetary policy.

These principals also apply on knowing how better to run a business: don’t be hedged by rules and regulations at the beginning, pay more attention to your survival, and you’ll learn more when you start your second business.

For many years, Huawei has been the only Chinese company on the list of the Top 50 R&D Spenders. Regardless of the economy and its income, what Huawei has been doing is investing in its future, dedicated to R&D, continuously and resolutely. This provisional work underscores Huawei’s accomplishments, making Huawei anindustry leader.

So, there are standard answers on how to run a company,which could be summarized as concentration and professional dedication, continuous investment on innovation and trying harder in R&D. Entrepreneurship is also important, every single company needs entrepreneurs to push aside all obstacles and difficulties, to implement strategies and ideas. We, as investors, are destined to look for such outstanding entrepreneurs and their companies, invest in them and partner with them.

At this key point of history, a country, a company, or asingle individual, will all need to find the right path. Four decades after the Reform and Opening-up, it’s time to learn from our experience and stop “wadding across


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