Biren Technology plans to raise nearly $7.07 billion through first placing

Biren Technology (6082) announced its first plaing plan on Monday to seize current development opportunities by issuing 153 million new H shares at HK$46.2 each, raising nearly HK$7.07 billion in gross proceeds.

The placement represents a discount of approximately 9.94 percent to last Friday’s closing price. It accounts for about 12.74 percent of the issued H shares and approximately 11.3 percent of the enlarged H share capital, with net proceeds of approximately HK$7.04 billion.

Biren, which was listed in early January, explained that since its listing, the company has identified additional funding needs due to accelerated market adoption, expansion of pre-research programs, increased customer engagement and validation activities, and greater near-term commercialization and supply chain commitments for next-generation products. These additional funding needs were not fully anticipated at the time of listing. 

In particular, as of the end of last month, more than 70 percent of the portion allocated to “working capital and general corporate purposes” from the global offering proceeds had already been utilized. Of the net listing proceeds, approximately HK$4.28 billion remains unused. The company therefore considers the additional cash flow from the placement necessary to provide more capital to meet its ongoing business development needs.

Biren noted that the rapid development of artificial intelligence and the explosive growth in token consumption continue to drive strong demand for general-purpose GPU (GPGPU) computing solutions, expanding the potential market and accelerating the commercialization of the company’s next-generation GPGPU products at a pace faster than expected at the time of listing. 

Given the evolving market landscape and the expanding scale of opportunities, the company believes it is necessary to adopt a prudent yet flexible financing strategy to strengthen its financial position, replenish capital as needed, seize emerging opportunities, and ensure long-term competitiveness.

Approximately 20 percent of the net proceeds from this placement will be used to strengthen research and development of new cutting-edge technology projects; about 60 percent will be used to accelerate the commercialization and production of next-generation products; about 10 percent for strategic investments and acquisitions; and about 10 percent for working capital and general corporate purposes.

The stock closed at HK$51.3 last Friday, up 6.2 percent. Since listing, the share price has risen 1.6 times from its offer price of HK$19.6.

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