Fuen Shares Plans to Raise $1.25 Billion in IPO to Expand Production Capacity for Recycled Fabrics

Fufen Co., Ltd. disclosed its prospectus on March 31, planning to publicly issue 58.3333 million shares, accounting for 25% of the total shares after the issuance, with an intended fundraising of 1.25 billion yuan. The application period for this issuance is April 10. According to the prospectus, the fundraising from the new share issuance will be used for the "Recycled Environmental Wool-like Dyeing Fabric Integrated Project under XIAOZHENG GONG CHU (2023) No. 82" and the "High-end Environmental Recycled Materials Research Institute and Green Intelligent Manufacturing Project."

Future Development Plan

In terms of sales channels, the company will continue to expand its market share and brand recognition, further develop international markets, prioritize serving major global apparel brands such as Uniqlo, H&M, and ZARA, and actively acquire new international clients like lululemon, continuously enhancing its global service capabilities. At the same time, the company will also focus on the domestic market, targeting well-known Chinese apparel brands as key development objectives.

Industrial Chain: We will refine, expand, and strengthen our recycled fabric business, continuously improving the upstream and downstream industrial chain to establish the Company as an industry-leading enterprise with a fully integrated value chain. First, starting in 2025, we will achieve partial in-house production and internal utilization of melange yarn. Second, we will accelerate the construction of the two fundraising investment projects to promptly expand production capacity for recycled fabrics and ensure the effective operation of the R&D Center. Third, we will efficiently advance the globalization of our production bases—maximizing production capacity at our Vietnam facility while establishing a robust international management system.

R&D: To enhance control over the recycled fabric industry chain, the company will: 1. Explore independent R&D of new materials such as recycled fibers and melange yarns, with a focus on establishing routine, standardized melange yarn development; 2. Strengthen collaborative partnerships with existing suppliers and advance the in-house R&D center project; 3. Build upon current fabric design and finishing technologies by integrating more fashionable, sustainable, and technologically advanced elements to elevate the company’s recycled fabric R&D to a higher level; 4. Deepen cooperation with universities and research institutions.

Fuen Company is a global eco-friendly fabric supplier centered on sustainable development, primarily engaged in the research and development, production, and sales of eco-friendly fabrics. It has grown into a large enterprise integrating fabric design, R&D, spinning, weaving, dyeing, finishing, and sales. Its main products are eco-friendly fabrics, primarily recycled fabrics, and the company has become a leading domestic enterprise in recycled fabrics for apparel. During the reporting periods, demand for recycled fabric products remained strong, accounting for 75.61%, 80.13%, 83.20%, and 86.63% of its main business revenue, respectively, with the proportion continuously increasing.

The eco-friendliness of the company’s fabrics is primarily reflected in the following aspects: 1) Raw materials: The main products utilize environmentally friendly materials, such as GRS-certified recycled polyester fibers and eco-friendly viscose fibers, as well as ZDHC-certified eco-friendly dyes and auxiliaries. 2) Production process: The company predominantly employs yarn-dyed spinning technology, thereby reducing the need for dyeing and finishing; it also customizes and upgrades intelligent production lines and highly efficient, eco-friendly treatment equipment to lower wastewater and exhaust emissions. 3) Green energy: The company employs green energy sources, including solar power and biomass fuel. The company has long focused on the research, development, and production of recycled fabrics. The raw materials for these recycled fabrics are derived from recovered and reused plastic products, textile waste, and other post-consumer or post-industrial materials, rendering them renewable and environmentally sustainable. In recent years, with the growing global promotion of sustainable development concepts, these recycled fabrics have increasingly gained recognition and acceptance from international apparel brands and consumers alike.