MAINBOARD-LISTED SIIC Environment : BHK 0% announced on Wednesday (Jul 6) that it will divest all its equity interest in waste treatment and incineration subsidiary Hongkong Navy New Energy (Dazhou) for RMB283.3 million (S$59.1 million)

 

In its bourse filing, the wastewater treatment company said that the purchaser, Sichuan SIIC Ecological Company, is not an &ldquo interested person&rdquo and that the consideration was determined after arm&rsquo s-length negotiations between both parties.

 

It added that the announced book value and net tangible asset value of the subsidiary stood at RMB282.2 million and RMB277.1 million respectively, according to an asset valuation report issued by Wan Long (Shanghai) Asset Appraisal.

 

The subsidiary&rsquo s net asset value stood at 2.0 per cent that of SIIC Environment it contributed 1.1 per cent of the group&rsquo s net profits as at Mar 31, 2022.

 

Pro forma, the group&rsquo s net tangible assets per share based on the latest audited financial statements of the group as at Dec 31, 2021 would have risen from RMB5.2672 to RMB5.2677 after the disposal. Pro forma earnings per share would also have risen from 27.35 to 27.40 after the disposal.

 

SIIC Environment said that the divestment would recover shareholder investment and generate profits for the group. The net proceeds of the deal would be used to finance general corporate and working capital requirements of the group.

 

MAINBOARD-listed SIIC Environment Holdings said that its revenue increased by 10.7 per cent to RMB181.1 million (S$38.2 million) for the quarter ended Sep 30, 2021, up from RMB163.5 million from a year earlier.

 

Revenue for Q3 also increased by 17.6 per cent to RMB1.77 billion, up from RMB1.51 billion a year ago.

 

Earnings per share stood at RMB7.03 cents for the quarter, up from RMB6.28 cents from the previous year.

 

No interim dividend was declared for the quarter, as was the case a year ago.

 

For the 9 months ended Sep 30, 2021, the company' s net profit was up 15.5 per cent at RMB513.8 million, up from RMB444.7 million the year before. Similarly, revenue rose by 22.3 per cent to RMB5.07 billion, up from RMB4.15 billion a year ago.

 

The company attributed the increase in revenue to the growth of operating and maintenance revenue from service concession arrangements.

 

Construction revenue also saw growth, driven by accelerated progress of construction projects. In particular, this segment' s revenue grew by 27.9 per cent year-on-year to RMB1.64 billion.

 

Earnings per share stood at RMB19.89 cents in 9 months ending Sep 30, 2021, up from 17.07 cents from the previous year.

 

The group said that governments at all levels in China have been constructing new municipal environmental protection projects as the country strengthens support for its environmental protection industry.

 

In the third quarter, the group was able to secure 8 new wastewater treatment projects with a total designed capacity of 11,400 tonnes per day. It has also signed upgrading or operations and maintenance (O& M) extension agreements for four wastewater treatment projects with a total designed capacity of 170,000 tonnes per day.

 

Three wastewater treatment projects with a total designed capacity of 10,300 tonnes per day also commenced operation in the same period.

 

SIIC Environment chief executive officer Yang Jianwei said: " To seize the market expansion opportunities presented by national energy-saving and emission-reduction policies, the group will continue to develop its water treatment business, improve its environmental protection technologies, and raise projects' benefits, so as to broaden its income sources."

Awarded seven new WWTP projects

The seven new WWTP projects in Heilongjiang signed by the Group have a total designed capacity of

6,350 tonnes. Details are as follows:

	Designed Treatment	Discharge	Concession
Name of Project	Period/O& M
Capacity (tonne/day)	Standard
	Period (year)
Yabuli Ski Resort WWTP O& M Project	4,000	Class I	8
(" Yabuli Project  " )	Standard B
Qixingpao Town WWTP O& M Project	800	Class I	16
(" Qixingpao Project  " )	Standard A
Qingyuan Town WWTP O& M Project	600	Class I	16
(" Qingyuan Town Project  " )	Standard A
Hanconggou WWTP O& M Project	300	Class I	8
(" Hanconggou Project  " )	Standard A
Wusu Town WWTP O& M Project	400	Class I	8
(" Wusu Town Project  " )	Standard A
Shenchang Town WWTP Project	100	Class I	16
(" Shengchang Town Project  " )	Standard A
Jixian Town WWTP Project	150	Class I	16
(" Jixian Town Project" )	Standard A

New upgrading agreements for two WWTP projects

1. The Group' s subsidiary Fuyuan City Longjiang Environmental Protection  Water-control Co., Ltd. signed a supplementary upgrading agreement with the Bureau of Housing and Urban-Rural Development of Fuyuan, regarding the Fuyuan City WWTP Project (" Fuyuan Project" ). Pursuant to the agreement, the discharge standard of the Fuyuan Project is to be upgraded from Class I Standard B to Class I Standard A, with the designed capacity being 10,000 tonnes/day.
2. The Group' s subsidiary Harbin City Lancheng Longjiang Environment Water Co., Ltd. signed an upgrading agreement with Harbin City Hulan District Wate Supply and Drainage Co., Ltd, regarding the Harbin City Hulan District WWTP O& M Project (" Hulan District Project" ). Pursuant to the agreement, the discharge standard of the Hulan District Project is to be upgraded from Class I Standard B to Class I Standard A, with the designed capacity being 20,000 tonnes/day.

Commenced commercial operation of a 10,000-tonne project

In addition, the Group completed upgrading its Youyi County WWTP BOT Upgrading Project (" Youyi Project  " ), the discharge standard of which meets Class I Standard A. The project, with a designed capacity of 10,000 tonnes/day, has been in commercial operation since August 2021.

The above-mentioned projects are expected to make positive contributions to the Group' s results. For investor relations inquiries, please contact  [email protected]

By Order of the Board

SIIC ENVIRONMENT HOLDINGS LTD.

Executive Director

Mr Yang Jianwei

Hong Kong and Singapore, 22 October 2021

As at the date of this announcement, the non-executive Chairman is Mr. Zhou Jun the executive Directors are Mr. Yang Jianwei, Mr. Zhu Dazhi, Mr. Xu Xiaobing, Mr. Huang Hanguang and Mr. Zhao Youmin and the independent non-executive Directors are Mr. Yeo Guat Kwang, Mr. An Hongjun and Mr. Zhong Ming.