China’s Largest Cement Kiln Waste Treatment Service Provider Conch Environment Listed by introduction on HKEx
China Conch Environment Protection Holdings Limited (“Conch Environment” or “Company”, 587.HK) is successfully listed by introduction on the main board of Hong Kong Stock Exchange on March 30th, 2022. CICC acted as the Lead Joint Sponsor.
Conch Environment is a leading player providing the eco-friendly and cost-efficient treatment of industrial solid and hazardous waste in China. The Company is headquartered in Wuhu, Anhui Province, with service coverage of more than 20 provinces in China, including Shaanxi, Henan, Hunan, Shandong, among others; the Company pioneered the use of cement kiln waste treatment services to facilitate the safe, harmless and efficient treatment of industrial solid and hazardous waste and were ranked as the largest cement kiln waste treatment service provider in terms of revenue in China in 2020.
Conch Environment’s increasing treatment capacity allows the Company to establish a diversified and high-quality customer base. The Company’s industrial solid waste treatment volume increased at a CAGR of 90.5% from 0.3 million tonnes in 2018 to 1.0 million tonnes in 2020, and industrial hazardous waste treatment volume increased at a CAGR of 78.5% from 0.1 million tonnes in 2018 to 0.4 million tonnes in 2020.
During the TRP, Conch Environment has achieved significant performance growth. In 2018, 2019, 2020 and nine months ended Sep 30, 2021, the Company generated revenue of RMB396.7 million, RMB737.8 million, RMB1,144.0 million and RMB1,194.4 million, respectively, achieved a 2018-2020 CAGR of 69.8%, and net income of RMB280.9 million, RMB426.7 million, RMB558.0 million and RMB457.3 million, respectively, achieved a 2018-2020 CAGR of 40.9%.
Cement kiln waste treatment technologies use the high temperature in the cement kiln to co-process waste during the cement production process. In comparison with traditional incineration treatment, which produces harmful emission and solid residues, cement kiln waste treatment can effectively eliminate these pollutants. The Company pioneered the use of cement kiln waste treatment technologies to facilitate industry upgrade towards safe, harmless and efficient treatment. The listing by introduction will further support the implementation of the national carbon peaking & neutrality strategy, practice the concept of “carbon neutrality”, and contribute to the realization of low-carbon transformation and the carbon peaking & neutrality goals in the 14th 5-year plan. At the same time, the listing provides a platform for the Company’s future financing needs, assists the Company to further develop its waste treatment business, and continue to maintain and enhance the Company’s dominant position in the waste treatment field to further enhance the Company’s core competencies.
As the Lead Joint Sponsor, CICC assisted the company to innovatively design the transaction structure. Through distribution in spicie and listing by way of introduction, the equity shares of the Company are proportionately distributed to the existing shareholders of Conch Venture, achieving maximization of existing shareholders’ interests. In addition, CICC also took the lead in assisting the Company to efficiently advance the reviewing process. CICC won high recognition from the client for our professional and efficient deal execution and teamwork capabilities with high-quality integrated investment banking services. CICC assisted Conch Venture to build an independent financing platform for its waste treatment business segment. This transaction forms a significant milestone in the cooperation between the two parties and lays a solid foundation for the further deepening of cooperation.
As a leading investment bank with “Chinese Roots, International Reach”, CICC is dedicated to offer high-quality value adding financial services to its clients, and will continue to support in first-class financial service to its clients through its extensive capital market expertise, seamless cooperation of onshore and offshore business, to contribute to the global capital raising & financing needs of our clients at different stages of development.