IMPORTANT – This document is confidential and is solely provided to you for your information purpose only. It is not allowed to be copied, published, circulated or distributed, directly or indirectly, to any other person, and will not be distributed to members of the public in Hong Kong until 9:00 a.m., Friday, April 21, 2017, Hong Kong time. By accepting this document, you have and will be deemed to have acknowledged and agreed that you will keep this document in strict confidence and will not distribute, deliver, transmit or reproduce this document to any third party in Hong Kong or elsewhere. This document is published solely in connection with the Preferential Offering and the Hong Kong Public Offering contemplated herein. This document is not an offer to sell the securities or a solicitation of offers to subscribe for or buy the securities in the United States and/or any other jurisdiction where such offer or sale is not permitted. The securities may not be offered or sold within the United States, absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. Any offering of securities to be made in the United States will be made by means of an offering circular that may be obtained from the issuer that will contain detailed information about the company and its management, as well as financial statements. Neither this document nor any copy of it may be taken or transmitted into the United States or any jurisdiction where the offer or sale of the securities is not permitted, and this document and any copy thereof may not be distributed, directly or indirectly, in the United States or any jurisdiction where the offer or sale of the securities is not permitted.
(Incorporated in the Cayman Islands with limited liability)
(Stock Code: 1257)
China Everbright Greentech Limited Announces Details of Proposed Listing on Main Board of the HKEX
Global Offering of 560,000,000 Shares at a price range between HK$5.18 and HK$5.90 per ShareInvestment Highlights
|A leader in the fast-growing environmental protection industry with substantial potential for further growth|
|Diversified business segments with strategically selected project portfolio|
|Rapid historic growth and significant growth prospects founded on the "Everbright" brand|
|Strong project pipeline, efficient execution capabilities and strong financing capacity to achieve rapid growth|
|Experienced and market-driven management team with strong execution capabilities|
HONG KONG, 20 April 2017 – China Everbright Greentech Limited ("China Everbright Greentech" or the "Company", together with its subsidiaries, collectively the "Group"), one of the leading specialty environmental protection service providers in the PRC, today announced the details of its proposed listing on the Main Board of the Stock Exchange of Hong Kong Limited ("HKEX").
The Global Offering comprises of an aggregate of 560,000,000 Offer Shares, of which 90% or 504,000,000 Shares will be offered via International Placing (including 56,000,000 Shares offered pursuant to the Preferential Offering at the offer price to the Qualifying CEIL Shareholders) and the remaining 56,000,000 Shares will be offered under the Hong Kong Public Offering. In addition, the Company intends to grant to the International Underwriters, according to the International Underwriting Agreement, an over-allotment option to allot and issue up to 84,000,000 additional Shares, representing approximately 15% of the initial number of Offer Shares available under the Global Offering.
The indicative offer price will range at between HK$5.18 and HK$5.90 per share. With the mid-point of the indicative offer price range being HK$5.54 per Offer Share, the Group's net proceeds from the Global Offering would amount to approximately HK$3.005 billion, after deduction of underwriting fees and commissions and other estimated expenses payable by the Company in connection with the Global Offering.
The Hong Kong Public Offering will open at 9:00 a.m. on Friday, 21 April 2017, and will close at 12:00 noon on Thursday, 27 April 2017. The offer price is expected to be determined on Thursday, 27 April 2017 and the allotment results will be announced on Friday, 5 May 2017. Dealings in the Shares on the HKEX are expected to commence on Monday, May 8, 2017 under the stock code 1257. Shares will be traded in board lots of 1,000 shares each.
China International Capital Corporation Hong Kong Securities Limited and CEB International Capital Corporation Limited are the Joint Sponsors. China International Capital Corporation Hong Kong Securities Limited, CEB International Capital Corporation Limited and China Everbright Securities (HK) Limited are the Joint Global Coordinators. China International Capital Corporation Hong Kong Securities Limited, CEB International Capital Corporation Limited, China Everbright Securities (HK) Limited, CCB International Capital Limited and China Merchants Securities (HK) Co., Limited are the Joint Bookrunners and Joint Lead Managers.
Proposed Use of Net ProceedsThe Group will use 80% of the net proceeds from the Global Offering to develop its business in the PRC through capital contribution to its pipeline projects for the development and construction of the facilities. Approximately 10% will be used for research and development and acquisitions of advanced technologies. Approximately 10%, will be used for working capital and other general corporate purposes.
A leader in the fast-growing environmental protection industryThe Group is a PRC specialty environmental protection service provider, focused on three business segments: biomass, hazardous waste treatment, and solar energy and wind power. The Group has a leading position in these markets in the PRC, with the fourth largest aggregate biomass power generation designed capacity and the third largest aggregate hazardous waste disposal designed capacity in China as of December 31, 2016 for projects in operation, under construction and at the planning stage, according to Frost & Sullivan. As of April 11, 2017, the Group had a diversified portfolio of 68 projects, including 24 projects in operation, 14 projects under construction and 30 projects at the planning stage, with an aggregate power generation designed capacity of 935.9 MW and an aggregate hazardous waste disposal designed capacity of 504,150 tons per annum.
The Group has a track record of steady growth. From 2014 to 2016, the Group's total revenue grew at a CAGR of 68.4%, with an year-on-year increase of 149.3% from HK$1,203.2 million in 2015, and HK$3,000.1 million in 2016. Profit for the year grew at a CAGR rate of 77.6% in 2014 to 2016, with an year-on-year increase from HK$271.4 million in 2015 to HK$629.5 million in 2016.
Diversified business segments with strategically selected project portfolioAgainst the backdrop of favorable industry trends, the Group has built a diversified portfolio of biomass, hazardous waste treatment, solar energy and wind power projects at strategic locations depending on the local resources and market conditions. The Group has been able to provide multiple services at the same location to satisfy various demands for the same client and achieve synergies among multiple projects in various business segments to improve overall profitability and accelerate our growth.
Unique biomass business modelThe Group has developed a unique business model of integrated biomass and waste-to-energy projects to provide one-stop services for local governments to handle both biomass waste and household waste at the same location. According to Frost & Sullivan, China Everbright Greentech was the only company to employ such integrated business model in China as of December 31, 2016. By sharing management teams, grid connection systems, water treatment systems and other ancillary systems between the biomass facility and the household waste-to-energy facility, this business model not only maximize environmental service output but also to lower the overall costs of development and operation, thereby increasing the overall investment returns and improving competitiveness.
Leading hazardous waste treatment business in strategic locationsThe Group has secured a strong foothold in the highly fragmented hazardous waste treatment market in China, by prudently mapping out selected project in strategic location, and sourcing hazardous waste treatment projects through targeting Eastern China where hazardous waste production is high. In addition, by its strong technical capabilities, the Group currently has the ability to safely treat 42 out of 46 categories of hazardous waste listed in the National Catalog of Hazardous Waste.
Strong project sourcing track record founded on the Everbright brandThe Group's Controlling Shareholder, China Everbright International Limited (CEIL), is a market leader in the environmental protection industry in China and has established a leading position in the waste-to-energy business. The parent company of CEIL, China Everbright Group, is a large-scale conglomerate among the Fortune Global 500 and has a well-recognized brand image. Riding on the "Everbright" brand and expertise shared by CEIL, China Everbright Greentech, after the spin-off, will enjoy a full complementary advantage with CEIL's existing businesses.
Strong project pipeline and efficient execution capabilitiesAgainst the backdrop of favorable industry trends, the Company has established a strong project pipeline ofbiomass, hazardous waste treatment, solar energy and wind power projects at strategic locations. As of 11 April, 2017, China Everbright Greentech had 14 projects under construction and 30 projects at the planning stage. After the commencement of commercial operation of these pipeline biomass projects, the Group's aggregate power generation designed capacity for the biomass projects in operation is expected to increase by 436.4%, the aggregate disposal designed capacity for the hazardous waste treatment projects in operation is expected to increase by 284.9%. Except for the existing projects under construction and at the planning stage, the Group is actively developing for new projects in order to further expand our project pipeline.
Experienced, stable and market-driven management teamThe Group's management team contributes a wealth of experience and in-depth industry knowledge as the Group executes its market-oriented business strategies. Its senior management team comprises a group of experts with an average of over ten years of experience in the environmental protection industry in assessing, sourcing, developing and managing environmental protection projects. Most of them have a tenure of over ten years at CEIL and have witnessed, promoted and shaped the growth of the Company's environmental protection business from its inception.
Mr. Chen Xiaoping, Chairman of China Everbright Greentech Limited, said, "China Everbright Greentech is one of CEIL's subsidiaries that specialize in environmental protection with the fastest growth and most potential. Ten years since its inception, China Everbright Greentech has gained its foothold in China's comprehensive biomass utilization and hazardous waste treatment industry, as well as having formed its own unique competitive advantages. The spin-off from CEIL has exactly provided a better access to the capital market the Company needs to supports its future growth. Leveraging our management's expertise, execution ability with proven track record, I believe the Company will, under Mr. Qian Xiaodong, our Executive Director and CEO's leadership, continue to maintain a fast and sustainable growth momentum."
Mr. Chen added, "Just like a healthy and well-developing ‘baby' to be born, China Everbright Greentech has been nurtured under the wings of CEIL. I genuinely wish that China Everbright Greentech will succeed the outstanding performances that CEIL transcends, and create greater value for the society and shareholders as a whole."
Mr. Qian Xiaodong, Executive Director and Chief Executive Officer of China Everbright Greentech Limited, said, "Going forward, China Everbright Greentech will seize policy opportunities to further expand market share and develop a more diversified project portfolio. We will continue to enhance our operational efficiency and technology research and development to strengthen our organic growth, and achieve synergies of multiple business segments through enhanced integrated service capability. We will also ensure our sustainable and stable development with the implementation of our environment, safety, health and social responsibility system and risk management system."