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China Jinjiang Environment Launches IPO in Singapore
HONG KONG, Jul 26, 2016 - (ACN Newswire) - China Jinjiang Environment Holding Company Limited ("Jinjiang Environment" or the "Company"), a leading waste-to-energy ("WTE") operator in the PRC with the largest waste treatment capacity in operation, has today registered its prospectus with the Monetary Authority of Singapore, in connection with its listing on the Main Board of the Singapore Exchange Securities Trading Limited (the "SGX-ST").
Jinjiang Environment's business primarily focuses on the planning, development, construction, operation and management of WTE facilities in the PRC. It operates 16 WTE facilities in 12 provinces, autonomous regions and centrally-administered municipalities in the PRC, and has an additional (i) four WTE facilities under construction, (ii) 12 WTE facilities in the preparatory stage and (iii) two WTE facilities over which it has an option to acquire following the listing.
THE OFFERING
The Offering comprises (i) an international placement of 87,798,300 Offering Shares (the "Placement") to investors, including institutional and other investors in Singapore, and (ii) a public offer of 4,621,000 Offering Shares in Singapore (the "Public Offer"). An over-allotment option to purchase up to an aggregate of 13,862,800 Shares (representing 15.0% of the total Offering Shares) at the Offering Price has also been granted by the Company.
The Public Offer opens at 12 noon on 26 July 2016 (Tuesday) and closes at 12 noon on 1 August 2016 (Monday). The Shares are expected to start trading on the SGX-ST at 9 a.m. on 3 August 2016 (Wednesday).
Concurrent with but separate from the Offering, the Company has entered into subscription agreements with certain cornerstone investors, namely Zhejiang United Investment (HK) Limited, HFI International (HK) Limited and CHINT Hong Kong American Investment Limited, for such cornerstone investors to subscribe for an aggregate of 112,400,000 Shares at the Offering Price (the "Cornerstone Tranche").
China International Capital Corporation (Singapore) Pte. Limited is the Sole Issue Manager, Global Coordinator, Bookrunner and Underwriter for the Offering. UOB Kay Hian Private Limited will be the Stabilising Manager.
USE OF IPO PROCEEDS
The Company intends to apply the net proceeds of approximately S$173.0 million (assuming the Over-allotment Option is not exercised) and S$185.1 million (assuming the Over-allotment Option is fully exercised) received from the Offering and the Cornerstone Tranche towards (i) the acquisition of Zhejiang Zhuji Bafang Thermal Power Co., Ltd. and Wenling Green New Energy Co., Ltd., (ii) investment in its pipeline and operating WTE projects and technical upgrading works at its existing WTE facilities, (iii) repayment of borrowings and (iv) working capital and general corporate purposes.
JINJIANG ENVIRONMENT: LEADING WTE OPERATOR IN THE PRC
The Company is the first private WTE operator in the PRC and continues to be the leading WTE operator in the PRC with the largest waste treatment capacity in operation. The Company has a total waste treatment capacity of 22,830 t/d for its WTE facilities in operation. Taking into account its pipeline projects, ongoing expansion works and its option to acquire a further two WTE facilities, the estimated total waste treatment capacity of all of the Company's WTE facilities, when fully completed and acquired will be in excess of 44,000 t/d. The Company was the first WTE operator in the PRC to develop and industrialise differential-density circulating fluidised bed ("CFB") technology for WTE with the establishment of the very first CFB WTE facility in the PRC in 1998.
Since 2014, the Company has started providing energy management contracting services to companies in the metallurgical, chemical and power generation industries. Such services include equipment selection, construction planning, residual heat utilisation, optimisation of operations and maintenance and energy saving services.
The Company has won numerous awards and certifications. Including but not limited to The Most Influential Company in the area of Solid Waste (2011), The Top Ten Most Influential WTE Enterprises in The PRC (2012 to 2015), The Leading WTE Enterprise in The PRC (2013 to 2015), Outstanding Investor of Venous Industrial Park in the PRC (2015) and Leading Competitive Integrated Waste Disposal Enterprise (2015). In addition, in the 2016 National Solid Waste Incineration Plants Ranking organised by the Ministry of Housing and Urban-Rural Development of the PRC, the Xiaoshan Jinjiang WTE Facility, Hankou Jinjiang WTE Facility and Yunnan Green Energy WTE Facility achieved the highest "AAA" grading, and five other WTE facilities of the Company achieved "AA" and "A" gradings.
BUSINESS STRATEGIES AND FUTURE PLANS
Going forward, Jinjiang Environment's goal is to expand its market share and consolidate its position as a leader in China's WTE industry. Jinjiang Environment also strives to be a comprehensive waste energy service provider through expansion into other verticals in the WTE industry. The Company hopes to achieve this through its strategies and future plans below:
- Maintain its market leading position through organic and inorganic growth opportunities;
- Improve its technical capabilities to enhance its operating efficiency;
- Diversifying in the WTE value chain and establishing the Company as an integrated waste management services provider offering a comprehensive suite of waste collection, transportation, pre-treatment and treatment services;
- Leveraging on its market position and experience to grow its energy management contracting and third party project management business; and
- Expanding the Company's business internationally, with a specific focus on South-east Asia and other developing countries.
DIVIDEND POLICY
The Company does not have a fixed dividend policy currently; but intends to recommend and distribute dividends of 50% of net profit after tax attributable to Shareholders (excluding exceptional items) for FY2016 and FY2017 (the "Proposed Dividend"), to reward Shareholders for participating in the Company's growth. However, the foregoing statements, including the statement on the Proposed Dividend, are merely statements of the Company's present intention and do not constitute legally binding statements in respect of the future dividends which may be subject to modification (including reduction or non-declaration thereof) in the sole and absolute discretion of the Company. Investors should not treat the Proposed Dividend or the dividends declared and paid by subsidiaries as an indication of the Company's future dividend policy. No inference should be or can be made from any of the foregoing statements as to actual future profitability or ability to pay dividends.
FINANCIAL PERFORMANCE
In FY2013, FY2014, and FY2015, Jinjiang Environment's total revenue amounted to RMB1,639.5 million, RMB1,435.2 million and RMB1,588.1 million respectively, while the profit and total comprehensive income for the year amounted to RMB283.6 million, RMB362.9 million and RMB405.6 million, respectively. Excluding discontinued operations relating to the voluntary ceasing of operations at the Jiaxing Plant in FY2014, The Company's total revenue for each of FY2013, FY2014, and FY2015 amounted to RMB1,276.7 million, RMB1,269.7 million and RMB1,588.1 million respectively, while our profit for the year from continuing operations amounted to RMB232.3 million, RMB325.9 million and RMB405.6 million, respectively.
Jinjiang Environment's gross profit for FY2013, FY2014 and FY2015 was RMB456.2 million, RMB620.9 million and RMB745.9 million, respectively. The Company's gross profit margin for FY2013, FY2014 and FY2015 was 35.7%, 48.9% and 47.0%, respectively.
For FY2015, our net cash generated from operating activities was RMB793.7 million. This was mainly attributable to our profit before tax of RMB582.7 million, which was positively adjusted primarily for non-cash items of RMB296.8 million, mainly including (i) depreciation of property, plant and equipment of RMB200.2 million and (ii) finance costs of RMB124.1 million.
Ms. Wang Yuanluo, Executive Chairman and Chief Executive Officer of Jinjiang Environment, concluded, "Being a pioneer and a market leader in the WTE industry in the PRC, our business primarily focuses on the planning, development, construction, operation and management of WTE facilities in the PRC. Due to the increased production of municipal solid waste as a result of the PRC's rapid urbanisation, favourable regulatory environment and local governmental support for the construction of WTE plants as well as increased public awareness of environmentally sustainable practices, the WTE business is one of the fastest growing sectors of the PRC's clean energy and environmental protection industry. According to Frost & Sullivan, the total waste treatment capacity of WTE facilities in the PRC increased from 80,800 t/d in 2010 to 181,400 t/d at the end of 2014, representing a CAGR of 22.4% from 2010 to 2014, and is expected to increase to 398,400 t/d by the end of 2019.
We believe that a listing on the SGX-ST will further enhance our brand image and recognition, and provide us with a platform to expand our business internationally, especially with a focus on South-east Asia. We are familiar with the Singapore market, having been previously involved in two tenders conducted by the National Environment Agency in Singapore. We have an established track record of safe, efficient and environmentally sustainable operations, delivering valuable economic and environmental benefits as we convert waste into power. We intend to leverage on our reach and extensive network to enhance our future growth and our technical expertise and research and development capabilities to allow us to innovate and adapt to the demands of the WTE industry."
Sectors: Daily Finance, Daily News
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