Congratulations! Jingyuan Environmental Protection successfully listed on the STAR Market!
On April 9, 2020, Jiangsu Jingyuan Environmental Protection Co., Ltd. ("Jingyuan Environmental Protection"), an invested company of China Zhongji Investment, was officially listed on the STAR Market of the Shanghai Stock Exchange, with the stock code: 688096. The initial public offering was 26.83 million shares, with an issue price of ¥14.34 per share. On the first day of trading, it closed at ¥29.05 per share, a 102.58% increase over the issue price. China Zhongji Investment invested in Jingyuan Environmental Protection in April 2017.
Environmental Protection Industry Faces Opportunities, Steady Performance Growth
In recent years, the state has introduced a series of laws and regulations to standardize and guide the field of water pollution control, guiding the healthy and sustainable development of the industry. To date, more than 10 relevant standards for industrial wastewater treatment, more than 30 national environmental standards for water pollutant discharge, and more than 20 local environmental standards for water pollutant discharge have been issued, defining the development boundaries for the industrial wastewater treatment industry. The intensive introduction of a series of policies has provided a good external policy environment for the industrial wastewater treatment industry.
Jingyuan Environmental Protection, as an industrial water treatment equipment provider, its main business is divided into three parts: Equipment and System Integration (EP), Engineering Contracting (EPC), and Design and Consulting (E). In 2017, 2018, and 2019, Jingyuan Environmental Protection's revenue was ¥166 million, ¥253 million, and ¥324 million, respectively; its net profit attributable to the parent company was ¥29.0211 million, ¥53.5210 million, and ¥61.2556 million, respectively. It can be seen that, Jingyuan Environmental Protection's revenue and net profit both doubled during the reporting period.
From the perspective of revenue structure, the proportion of engineering contracting business is increasing, while the proportion of equipment and system integration business is relatively decreasing. From 2017 to 2019, the proportion of engineering contracting business was 12.90%, 27.39%, and 69.58%, respectively. Jingyuan Environmental Protection stated: "Compared with equipment and system integration business, engineering contracting business provides installation and construction services in addition to the sale of complete sets of equipment, covering the entire process from design to implementation, with a wider business scope."
Large Capacity in the Thermal Power Market, Expanding Non-Power Business
According to the China Environmental Statistics Yearbook (2016), China's industrial wastewater mainly comes from the chemical, papermaking, textile, coal, agricultural and sideline food processing, ferrous metal smelting, and power industries, with a combined emission share of more than 60%, making it the main source of industrial wastewater and the area with the most concentrated wastewater treatment. Currently, Jingyuan Environmental Protection's business mainly focuses on the power industry. Thermal Power Industry Water Treatment Market is divided into three parts: the traditional new market, the renovation market, and the zero-emission market, The total market capacity is estimated to be about ¥6 billion to ¥11 billion The vast market capacity of the thermal power water treatment market has laid a solid market foundation for the rapid growth of Jingyuan Environmental Protection's revenue.
While deeply cultivating the water treatment industry in the power sector, Jingyuan Environmental Protection is also actively expanding its non-power business. Currently, domestic industrial wastewater mainly comes from the chemical, papermaking, textile, coal, agricultural and sideline food processing, ferrous metal smelting, and power industries, with a combined emission share of more than 60%, making it the main source of industrial wastewater and the area with the most concentrated wastewater treatment.
Against this backdrop, Jingyuan Environmental Protection established its Guangzhou branch in 2016 to focus on breaking through in the non-power industry; in 2018, it established a wholly-owned subsidiary, Jiangsu Jingyuan Qihang Investment Co., Ltd., responsible for the company's external investment functions in the "greater environmental protection" field; in 2019, it established a Beijing branch to continue expanding into the non-power sector, currently mainly developing the metallurgy, coal chemical, and petroleum industries.
Data shows, Jingyuan Environmental Protection's revenue from the chemical industry in 2018 was ¥64.1721 million, accounting for 25.34% of its operating revenue, and its revenue from the metal products industry was ¥12.8941 million, accounting for 5.09%. The expansion into the non-power sector has already shown initial results.
Significant Core Technological Advantages, Numerous High-Quality Clients
The application fields of industrial water treatment are very broad and involve many products. Currently, most companies can only provide water treatment services for one or some production areas. There are few companies in the industry that can master complete water treatment technology, especially in the field of power industry water treatment. Enterprises need to provide targeted project design for each project's different characteristics. In addition to requiring the ability to provide effluent water quality that meets the requirements of power plants, it also requires high safety and stability, which means very high technical requirements.
As early as 1999 when it was established, Jingyuan Environmental Protection mainly focused on water treatment equipment for coal-fired power plants. In 2012, Jingyuan Environmental Protection further innovated on the basis of the mainstream chemical dosing coagulation method, launching electronic coagulation treatment technology and applying it to the power plant water treatment field. Compared with the chemical dosing coagulation method, electronic coagulation treatment has a relatively high investment cost, but it is simple to operate, has lower operation and maintenance costs, and can reduce the amount of chemical sludge produced, preventing secondary pollution; the electronic coagulation treatment technology is also superior in operating efficiency and service life.
In addition, in 2015, Jingyuan Environmental Protection successfully completed the design, testing, and pilot testing of the "zero-emission system for desulfurization wastewater" ; in 2018, it completed the electrocatalytic oxidation technology for difficult wastewater research and development, and put the product on the market. These two independently developed core technologies have also opened up a broad market for "zero-emission" of industrial wastewater for Jingyuan Environmental Protection.
Currently, Jingyuan Environmental Protection's market share in the coal-containing wastewater and desulfurization wastewater fields in the power industry is generally leading . As of the signing date of the prospectus, Jingyuan Environmental Protection has a total of 7 invention patents, 28 utility model patents, and 38 software copyrights.
With its advanced water treatment technology and mature project management experience, Jingyuan Environmental Protection currently has a very significant customer resource advantage and brand advantage, and has successfully served China's five major power generation groups and major local power enterprises such as China Resources Power, Beijing Energy Group, and Guangdong Power Group, and Leading industry enterprises such as GF Group, Zhongtai Group, and Fengle Seed Industry Completed numerous large-scale, complex, and high-quality industrial water treatment projects, and obtained qualified supplier qualification from China National Nuclear Corporation on October 31, 2012.
Regarding future development plans, Li Wulin, Chairman and General Manager of Jingyuan Environmental Protection, stated:"The company will strive to seize the golden opportunity of national policies guiding industry development. In the field of water treatment, we will be technology-oriented, providing customized water treatment equipment and systems for different customers. While maintaining our technological advantages in power industry water treatment, we will also expand into other industrial water treatment markets, ultimately becoming one of the leading providers of comprehensive water treatment solutions."
