Use up and down arrow keys to resize the meta box pane.
- Fragrance maker clears Shenzhen exchange review after prior withdrawals in 2020 and 2023
- Concerns linger over R&D intensity, capacity utilization and governance as company re-enters IPO pipeline
Grascent Co., Ltd. (格林生物), a Hangzhou-based fragrance producer, secured approval for its initial public offering on May 28, marking a third attempt at a mainland China listing after two previous withdrawals, even as questions remain over its growth model and governance structure.
The Shenzhen Stock Exchange listing review committee said the company met issuance, listing and disclosure requirements, making it the 76th A-share IPO candidate cleared in 2026 and the first IPO project this year for underwriter Changjiang Securities.
Grascent previously applied for a ChiNext listing in December 2020 and again in June 2023, withdrawing both applications before reaching the final stage.
Its latest approval brings the process a step closer to market debut, though it still must complete registration submission and final regulatory registration before trading can begin.
The company has not announced a listing date. Under China’s ChiNext IPO process, candidates must move through application acceptance, regulatory questioning, listing committee review, registration submission, registration approval and finally issuance.
A 690-million-yuan IPO
Grascent plans to issue up to 33.33 million shares and raise 690 million yuan ($102 million), according to its prospectus.
Funds will be used for a 6,300-ton-per-year advanced fragrance production project, smart factory upgrades, R&D system improvements and working capital.
Of the total, 420 million yuan is earmarked for expanding high-end fragrance capacity, including strengthening production of turpentine- and sandalwood-based compounds, while adding synthetic musk derivatives and cedarwood oil product lines.
Headquartered in Jiande, a prefecture-level city governed by Hangzhou, Grascent focuses on fragrance ingredients used in daily chemical products.
It has built a portfolio spanning turpentine oil, cedarwood oil and fully synthetic fragrance categories, with nearly 40 product lines including sandalwood series compounds, methyl cedryl ketone and turpentine derivatives.
The company supplies global fragrance and consumer goods groups including Givaudan, DSM-Firmenich, IFF, Symrise and Procter & Gamble. Overseas sales account for more than 85% of revenue.
Still going strong at 84
Founder Lu Wencong, an 84-year-old Zhejiang University chemistry graduate from the 1963 cohort, has spent more than 50 years in the fragrance industry.
He previously worked as a technical staff member and factory executive, later serving as vice chairman of IFF’s Hangzhou operations before founding Grascent in 1999 at age 57.
Financial data show steady expansion. Revenue rose from 735 million yuan in 2023 to 1.075 billion yuan in 2025, while net profit increased from 93 million yuan to 179 million yuan, implying compound annual growth rates of 20.95% and 38.78%, respectively.
In the first quarter of 2026, revenue reached 318 million yuan, up 15.95% year-on-year, with net profit of 50.09 million yuan.
Gross margins in its fully synthetic fragrance segment improved from 32.58% in 2023 to 41.67% in 2025. R&D spending totaled 81.96 million yuan over the reporting period, rising from 2.52% to 3.47% of revenue during the reporting period.
The company is among the few domestic producers with industrialized production capabilities for turpentine-derived compounds and specialty fragrance chemicals.
It also said its production expansion plan is based on upgrading both traditional and synthetic product lines.
Grascent’s controlling shareholder is founder Lu Wencong, who holds 27.11% directly, while his daughter Lu Wei owns 9%. The pair signed a concert party agreement in June 2025, making them joint de facto controllers.
Lingering structural risks
Despite clearing the latest review stage, analysts continue to flag structural risks tied to the company’s past IPO setbacks and operational profile.
During its first attempt in 2020, Grascent withdrew its application shortly after submission following disclosure issues, including an undisclosed 200,000 yuan environmental penalty at a subsidiary that was later flagged during regulatory inspection.
Its second attempt in 2023 was also withdrawn after regulators questioned its ChiNext positioning and growth profile.
Concerns included sub-3% R&D intensity, potential timing-related inflation in R&D staffing costs, capacity utilization of 53.87% despite expansion plans, and heavy reliance on overseas markets exposed to raw material volatility.
These issues, according to market observers, have not fully disappeared.
Analysts also point to governance questions, including succession planning for the 84-year-old founder and whether the family-controlled structure can support long-term stability.
