Chinese waste-to-energy operator seeks SGX listing

China Jinjiang Environment's IPO launched yesterday (July 26) consists of an international placement tranche of 87.7 million shares and a public offer of 4.6 million shares at 90 cents each.

 

The firm, which operates the largest waste-treatment services in China, has an option to issue up to 13.8 million additional shares.

 

China Jinjiang Environment has entered into agreements with cornerstone investors to take up 112.4 million shares separately from the IPO. These include Zhejiang United Investment (HK), HFI International (HK) and CHINT Hong Kong American Investment.

 

The firm hopes to raise net proceeds of US$127 million if the over-allotment option is not exercised, and up to US$136 million if it is activated.

 

China Jinjiang Environment plans to use some of the funds to acquire Zhejiang Zhuji Bafang Thermal Power Company and Wenling Green New Energy Company.

 

The proceeds have also been earmarked for upgrading work at its facilities, for working capital and to repay borrowings.

 

The company operates 16 waste-to-energy facilities in China with a total waste-treatment capacity of 22,830 tonnes per day.

 

An additional four facilities are under construction while 12 are in the preparatory stage.

 

Since 2014, the company has been providing energy management contracting services to firms in the metallurgical, chemical and power-generation industries.

 

China Jinjiang Environment achieved a total revenue of 1.64 billion yuan in 2013, 1.43 billion yuan in 2014 and 1.58 billion yuan (US$236 million) in 2015.

 

The company registered a gross profit margin of 35.7 per cent in the 2013 financial year, 48.9 per cent in 2014 and 47 per cent in 2015.

 

Wang Yuanluo, executive chairman and chief executive officer of China Jinjiang Environment, said: "We believe that a listing on the SGX will further enhance our brand image and recognition, and provide us with a platform to expand our business internationally, especially with a focus on Southeast Asia."

 

(US$1 = 6.68 yuan as of 7/27/2016 via oanda.com)

 

The public offer closes at noon on Aug 1, with trading expected to start on Aug 3.