Wuzhou Energy Holding Limited (referred to as "Wuzhou Energy"), from Xuchang, Henan, submitted its prospectus to the Hong Kong Stock Exchange on June 27, 2024, and plans to be listed on the main board of the Hong Kong Stock Exchange. In 2023, the company's overall sales volume was 18,000 kiloliters, up 28.10% year-on-year, showing significant growth. In terms of product structure, the operating income of 10-30 billion yuan products was 401/1288/60 million yuan, respectively.

Wuzhou Energy's prospectus link:

https://www1.hkexnews.hk/app/sehk/2024/106574/documents/sehk24062701958_c.pdf

Main Business

Wuzhou Energy, established in 2001, has been operating in the natural gas industry in Henan Province for over 20 years, and is engaged in three business segments, including (1) selling natural gas through urban pipeline networks to end-users based on franchise rights; (2) long-distance pipeline business; (3) other businesses. According to franchise rights, Wuzhou Energy sells and distributes pipeline natural gas in three franchise areas in Xuchang City, namely the Changge franchise area, the Xuchang franchise area, and the Yanling franchise area, operating city pipeline networks with no less than 1,500 kilometers of medium and high-pressure and mortgage pipelines. The company has the exclusive rights to sell and distribute pipeline natural gas and build urban pipeline networks in the franchise areas for a period of 30 years, with expiry dates of May 2036, September 2041, and March 2042, respectively. According to Frost Sullivan, in 2023, based on the sales volume of pipeline natural gas to end-users under exclusive franchise rights, Wuzhou Energy is the largest natural gas distributor in Xuchang, a major prefecture-level city in Henan Province.

selling natural gas through urban pipeline networks to end-users based on franchise rights

Wuzhou Energy is located in three franchise areas in Xuchang City, namely the Changge franchise area, the Xuchang franchise area, and the Yanling franchise area, operating city pipeline networks with no less than 1,500 kilometers of medium and high-pressure and mortgage pipelines. The company has the exclusive rights to sell and distribute pipeline natural gas and build urban pipeline networks in the franchise areas for a period of 30 years, with expiry dates of May 2036, September 2041, and March 2042, respectively. According to Frost Sullivan, as of December 31, 2023, Wuzhou Energy has the second longest natural gas long-distance pipeline in Henan Province.

long-distance pipeline business

including wholesale of pipeline natural gas and providing pipeline natural gas transportation services to other natural gas operators. Wuzhou Energy operates three long-distance pipelines, namely the Yudong line, the Zhongkai line and the Kaixu line, all of which are provincial natural gas pipelines, spanning four prefecture-level cities in Henan Province - Xuchang, Zhengzhou, Kaifeng and Shangqiu, with a total length of about 287.7 kilometers. According to Frost Sullivan, as of December 31, 2023, Wuzhou Energy has the second longest natural gas long-distance pipeline in Henan Province.

other businesses

including providing construction and installation services and selling compressed natural gas.

Shareholder Structure

According to Wuzhou Energy's prospectus, its shareholder structure before listing is as follows,

Mr. Wan Xiaotian (77.78%) and Mr. Wan Sihai (22.22%) hold 90% of the shares through WXT Holdings;

Ms. Wan Li holds 10% of the shares through WSH Holdings;

Mr. Wan Xiaotian, Mr. Wan Sihai, and Ms. Wan Li collectively hold 100% of the shares.

Mr. Wan Sihai is the father of Mr. Wan Xiaotian and the older sister of Mr. Wan Li.

Management Team

The board of directors of Wuzhou Energy consists of seven directors, including:

• 4 executive directors: Mr. Wan Xiaotian (Chairman of the Board)(formerly known as Wan Liang), Mr. Wan Sihai, Mr. Wan Jiafeng (Chief Executive Officer), Mr. Hou Lei;

• 3 independent non-executive directors: Mr. Liu Jianchang, Mr. Wang Jingxun, and Ms. Yang Lin.

In addition to executive directors, senior management includes Mr. Guo Wenjie, Chief Financial Officer.

Corporate Performance

According to the prospectus, Wuzhou Energy's operating income in 2021, 2022 and 2023 was RMB 948 million, RMB 1.266 billion and RMB 1.217 billion, respectively, with corresponding net profits of RMB 59 million, RMB 111 million and RMB 110 million.

Intermediary Team

The main intermediary team for this IPO of Wuzhou Energy includes: Guotai Junan I as its exclusive sponsor; EY as its auditor; King & Wood Mallesons and King & Wood Mallesons (Hong Kong) as its Chinese and Hong Kong lawyers, respectively; Jingtian & Gongcheng and Dechert as its brokerage Chinese and Hong Kong lawyers, respectively; and Foster Sullivan as its industry consultant.