On June 28, 2023, Silver Dragon Water Supply Group Limited (“Silver Dragon Water Supply”) from Beijing submitted a prospectus to the Hong Kong Stock Exchange to be listed on the Hong Kong Main Board.
Link to Yinlong Water Supply prospectus:
Main business
Yinlong Water Supply is a water supply operator mainly engaged in supplying tap water, raw water and direct drinking water from pipelines in China.
According to the Frost & Sullivan Report, in 2022:
Based on the length of the water supply network, Yinlong Water Supply has the largest water supply network among all water supply companies in China.
In terms of urban water sales volume and tap water sales volume, Yinlong Water Supply ranked sixth among all water supply companies in China, with market shares of 0.7% and 1.1% respectively.
In terms of the amount of water sold, Yinlong Water Supply ranked first among all domestic pipeline direct drinking water supply companies, with a market share of 7.3%.
In terms of urban water supply, Yinlong Water Supply constructs and operates water purification plants and water pipelines, generally supplying urban water to end users. Our revenue mainly comes from urban water supply business, urban water supply construction services, and installation and maintenance services. As of March 31, 2023, the length of Yinlong Water's water supply network is about 148,000 kilometers, and it is estimated that it covers more than 30 million people. The company's business scope covers a total of 60 districts, counties and county-level cities in 13 provinces and cities across the country, including 60 tap water supply projects with 158 running tap water treatment plants and 8 active raw water supply projects. As of March 31, 2023, the total design, installation and planned treatment capacity of its urban water supply business was 14.1 million tons/day, including 8.3 million tons/day in operation, 1.6 million tons/day under construction, and 4.2 million tons/day planned.
In terms of piped direct drinking water supply, tap water is mainly processed into drinking water by installing advanced water filtration equipment at the terminals of tap water pipes to supply direct piped drinking water to local residential areas and non-resident users (including hospitals, schools, commercial institutions, public institutions, etc.). The company also sells a small number of independent direct drinking water equipment to users. As of March 31, 2023, Yinlong Water Supply has operated more than 3,600 piped direct drinking water supply projects in 22 provinces, cities and autonomous regions across the country, with a total of 183 districts, counties and county-level cities, which are estimated to serve about 4.5 million people, of which about 2.4 million are located in the area where the company's existing urban water supply projects are located. Furthermore, as of the same date, Yinlong Water Supply had more than 700 pipeline direct drinking water supply projects under construction.
Shareholder structure
According to the prospectus, in the pre-listing shareholder of Yinlong Water Supply, China Water (00855.HK), the controlling shareholder, held 100% of the shares.
Directors and Executives
The board of directors of Yinlong Water Supply consists of 7 directors, including 2 executive directors, 2 non-executive directors, and 3 independent non-executive directors.
Board of Directors (7 members)
Executives (3)
Executives include Mr. Liu Zhaohui, executive general manager, Mr. Xie Kejun, deputy general manager, and Mr. Tao Hua, deputy general manager.
Company performance
According to the prospectus, in the past fiscal year 2021, fiscal year 2022, and fiscal year 2023 (the fiscal year ends on March 31 of each year), Yinlong Water's operating income was HK$8.47 billion, HK$10.147 billion and HK$10.248 billion, respectively. The net profit for the corresponding period was HK$2,189 billion, $2,401 million and HK$2,345 billion, respectively.
Intermediary team
The intermediary team of Yinlong Water Supply's IPO mainly includes: HSBC and Huatai International as co-sponsors; PricewaterhouseCoopers as its auditors; Jingtian Gongcheng and Norton Roche are the company's Chinese lawyers and the company's Hong Kong lawyers respectively; Kindu and Mayer Stahl are the Chinese lawyers for the brokerage firm and Hong Kong lawyers respectively; and Frost Sullivan as independent industry advisors.