Key dates:
Public sale deadline: 12:00 noon on December 18, 2018
Public Notice Application Results: 2018/12/27
Listing date: December 28, 2018
Exclusive Sponsor:
Bank of Communications International (Asia) Limited
Statistical data summary:
Number of shares offered globally: 268,800,000 shares
Percentage of shares offered in Hong Kong: 10%
Offer Price: HK$1.76 to HK$2.34
Estimated amount raised: $473 million to HK$629 million
Admission fee per hand: HK$4,727.16
Group Overview
The group is a vertically integrated power supplier and service provider in Yibin City, Sichuan Province, with services covering power generation and power distribution and sales. The Group's business includes (i) power business, including power generation and supply; and (ii) power engineering construction services and related business (including power engineering construction services and sales of power equipment and materials).
The power business of the Group concerned mainly involves (i) hydroelectric power generation; (ii) power distribution; and (iii) the sale of electricity to end users. Electricity for the power business is produced or purchased from third party suppliers by hydropower plants owned or operated by a group, which is then distributed to industrial, commercial, household and other users through the group's power grid.
Industry Overview
According to Euro, Yibin's total power generation increased from 27.2 billion kilowatt-hours in 2013 to 31.8 billion kilowatt-hours in 2017, with a compound annual growth rate of 4.0%. According to Euro, the amount of electricity generated by hydropower accounted for about 72.6% of the total electricity generated in 2017, which is the mainstream power generation method in Yibin. During the above period, electricity prices on the grid in Yibin City ranged from RMB 0.29 per kWh to RMB 0.31 per kilowatt-hour.
Risks
The majority of the group's revenue comes from electricity sales to customers located in the power supply service area in Yibin City, Sichuan Province. The business growth is largely dependent on the continued economic growth of Yibin City. If Yibin's economy does not grow as expected or if there are any major adverse changes in the city's economic or social situation, then the Group's business, operating results, and financial condition may also be significantly adversely affected.
valuations
According to the prospectus, it is assumed that the global offering was completed on June 30, 2018. Based on the anticipated issuance of 1,074 million shares after the completion of the stock offering, the net value range of tangible assets per share adjusted without audit notes is $2.64 to $2.78 (calculated at the exchange rate of HK$1.00 to RMB 0.8876).
