On June 6, Guolong Water (01857.HK) announced that on June 6, 2024, the company, Shanghai Construction and Anyang Housing and Urban-Rural Development Bureau signed a franchise agreement for the project, and the consortium will establish a project company. The total investment amount of the project is expected to be about RMB 663 million. The total investment amount shall not exceed RMB 690 million under any circumstances.

The company will contribute approximately RMB 219 million to the project company as part of the project company's registered capital. After the capital contribution is completed, the project company will be owned 99% by the company and 1% by Shanghai Construction.

Anyang Housing and Urban-Rural Development Bureau will grant the project company exclusive franchise rights for the project during the franchise period, and will provide investment and financing, construction, operation and maintenance, transfer, and sewage treatment services and collect sewage treatment fees for the sewage treatment plant. The project will include the construction of a sewage treatment plant with a designed daily sewage treatment scale of 100,000 cubic meters and a sewage pipeline network of 10.3 kilometers with an area of 87 mu. During the franchise period, the project company has the right to use the land for the project, and has the right to construct, operate and maintain the project, as well as collect sewage treatment service fees.

The company has a business market in Henan Province, China, and this project is a new project in the main sewage treatment business field of the company in Henan Province. Therefore, this project will further expand the company's visibility and influence in Henan Province and surrounding areas, and establish a good foundation for the company to undertake sewage treatment projects in the future. The project is expected to bring long-term returns and value to the company's shareholders.