With an IPO Waiting, Golden Metropolis Says Future Lies with ‘Curtain Wall' Construction

Expect a slew of big new buildings with airy glass or aluminum exteriors, according to this construction company that expects to capitalize on those curtain walls.

Author: Ed Newton   

Taking advantage of what it calls "a new trend in architecture in China," a Chinese construction contractor with big hopes for expansion is looking to be among the next Chinese companies to trade on the U.S. markets.

Golden Metropolis International Ltd. is expected to complete its initial public offering soon for as much as $10 million on the Nasdaq exchange. It plans to be listed using the ticker symbol "WALL."

And that makes sense. The company, which operates through its subsidiary, Wuxi Jincheng Curtain Wall Co. Ltd., specializes in "curtain wall" construction, which provides a thin, non-structural wall attached to interior studs. No date has been set for the offering, but its registration with the Securities and Exchange Commission is pending.

The wall curtain was especially popular among post-war modernist architects, who liked its airy look and its ability to introduce infusions of natural light into large structures. The technique became popular after World War II, when aluminum, which because of its lightness and toughness is usually used as the curtain's underpinning, was suddenly available for non-defense purposes. The first curtain wall project in New York City was the United Nations Secretariat Building, built with its mostly glass exterior in 1948.

The trend in China is now booming, the company said. With the demand for new office buildings, hotels, airports shopping malls and other infrastructure projects associated with a high-growth economy, Golden Metroplois is betting that the demand for its services will bring big profits. 

"The curtain wall design has been advancing rapidly, from the simple frame design to the unitized, point-supported, double-skinned, and membrane-structured frame design," the company notes in its SEC application. "In addition, more energy-efficient, ecological façade panels, photoelectric panels, and intelligent panels are starting to become more common in our industry." 

Indeed, one estimate from the aptly named China's Decoration Association Curtain Wall Committee projects that the curtain wall market's current output of $58 billion will grow to $87 billion by 2020.

 Two Decades in the Field 

Golden Metropolis, under its former name, Yun Han International, has 20 years of experience in the field, with dozens of completed projects. In January 2017, the company and its subsidiaries reorganized and reincorporated in the British Virgin Islands as Golden Metropolis International. All of the shares are currently owned by the company's chairman, Zuoliang Zha, and his son, Minpei Zha, who is the chief executive offficer.

The company handled 120 projects in 2016. Most of them involved contracts under $10 million, but two were for over $100 million and 10 were for between $50 million and $100 million, The total was up from 93 projects in 2015. 

Revenue for the company in 2016 totaled $76.8 million leading to a gross profit of $11.7 million. The company said it expects results for 2017 to be about the same or slightly better. 

Located in southern Jiangsu Province, Golden Metropolis notes that it has "completed projects throughout China with specialized materials, complex geometry, novel structural and mechanical system designs." It adds: "Our curtain wall systems combine innovative design with state-of-the-art materials and performance." 

Company documents say that its growth strategy includes an initiative to break into interior design, particularly in commercial and public building, with the idea of unleashing "synergistic" business. 

The company also plans to expand further into the booming greater Beijing area and to perfect the heat-insulation and airtightness of its curtain wall projects. 

Golden Metropolis devotes a segment of its operating expenses to research and development, with 9 percent of its total staff engaged in those pursuits. Nevertheless, the company's R&D budget dropped from $3.2 million in 2015 to $2.5 million in the subsequent year. Construction, like other endeavors, requires researchers to keep up with new developments. 

The underwriter for the Golden Metropolis IPO is Boustead Securities.