HONG KONG, Dec. 29, 2015 /PRNewswire/ --
Highlights
Financial Highlights
| For the year ended 31 Dec |
For the 6 months ended 30 Jun |
||||
| (RMB million) |
2012 |
2013 |
2014 |
2014 |
2015 |
| Revenue |
3,269.8 |
4,072.1 |
4,289.3 |
1,818.1 |
2,139.8 |
| Gross Profit |
167.9 |
202.2 |
229.7 |
91.2 |
110.1 |
| Profit before tax |
68.0 |
92.4 |
116.8 |
49.8 |
61.6 |
| Total comprehensive income for the year/period |
46.7 |
60.7 |
82.8 |
35.4 |
45.5 |
| Gross Profit Margin (%) |
5.1 |
5.0 |
5.4 |
5.0 |
5.1 |
The largest construction company in Jiaxing, Zhejiang Province in terms of output value in 2014, Jujiang Construction Group Co., Ltd. ("Jujiang Construction", together with its subsidiaries, the "Group"; stock code: 1459), announced today the details of its plan to list on the Main Board of The Stock Exchange of Hong Kong Limited ("SEHK").
A total of 133,360,000 H shares will be offered under the Global Offering, of which 120,024,000 H Shares, or 90% will be offered by way of International Offering. The remaining 10%, or 13,336,000 H Shares, will be offered under the Hong Kong Public Offering. The offer price per offer share is expected to be not less than HK$ 1.25 and not more than HK$1.45. The Hong Kong Public Offering will commence on 30 December 2015 (Wednesday) and close at 12:00 noon on 5 January 2016 (Tuesday). The final Offer Price and allotment results are expected to be announced on 11 January 2016 (Monday). Dealings of Shares on the Main Board of the SEHK is expected to commence on 12 January 2016 (Tuesday).
Assuming an Offer Price of HK$1.35 per Offer Share (being the mid-point of the indicative Offer Price range), the aggregated net proceeds from the Global Offering (after the deduction of listing related expenses) will be approximately HK$167.8 million. Jujiang Construction intends to use approximately 65%, or approximately HK$109.1 million, to fund new construction projects that the Group undertakes; approximately 20%, or approximately HK$33.5 million to repay the principal of and interest on the Group's loan on or before their respective maturity dates; approximately 10%, or approximately HK$16.8 million, to invest in new equipment and machinery to undertake larger-scale and more complex construction projects in or before 2017; and approximately 5%, or approximately HK$8.4 million for general corporate purposes.
Guotai Junan Capital Limited is the Sole Sponsor of the Global Offering. Guotai Junan Securities (Hong Kong) Limited is the Sole Global Coordinator, Sole Bookrunner and Sole Lead Manager of the Global Offering.
Business Overview
Established in 1965, Jujiang Construction is one of the earliest construction companies in Jiaxing. The Group is principally engaged in construction contracting business. It also provides design, survey and consultancy services to customers, as well as manufactures civil defense products. According to Ipsos, Jujiang Construction was the largest construction company in Jiaxing, Zhejiang Province in terms of output value in 2014, holding a market share of 10.4%.
Construction Contracting Business
The Group is principally engaged in undertaking construction projects as a general contractor, in which it performed all major aspects of the construction project, including building construction, foundation works, curtain wall construction, building decoration and fire proofing projects. During the Track Record Period, the Group completed a total of 550 construction projects, including residential construction projects, commercial construction projects, industrial construction projects and public works construction projects. The Group's construction projects were mainly located in Zhejiang Province, others were located in Jiangsu, Anhui, Shandong and Liaoning Provinces.
A substantial majority of the Group's revenue was generated from this segment. For the years ended 31 December 2012, 2013 and 2014, and the six months ended 30 June 2015, revenue generated from this segment amounted to RMB3,266.8 million, RMB4,052.8 million, RMB4,258.5 million and RMB2,132.0 million respectively.
Other Businesses
Leveraging its experience in the construction contracting business, the Group also provides design, survey and consultancy services to its customers. Jujiang Construction is one of the few companies in Jiaxing holding the Engineering Design Certificate, which allows it to provide design, survey and consultancy services for building construction projects of any scale in China.
The Group commenced manufacturing civil defense products at its Jiaxing Production Facility in April 2014. The Group mainly manufactures heavy duty construction-related structures, such as protective doors and protective valves that protect against radioactive materials, thermal radiation, toxic biological and chemical agents and high temperatures.
Competitive Advantages
The Group is the largest construction company in Jiaxing, Zhejiang Province and has expanded its operations to other regions in Zhejiang Province, as well as other provinces and regions in China. Jujiang Construction has a growing presence in Zhejiang Province and other provinces and regions in China, and has been undertaking an increasing number of large construction projects. The Group has strategically established 11 branch offices in Zhejiang, Jiangsu, Anhui, Shandong and Liaoning Provinces, to focus on providing services and products in second- and third-tier cities with sizeable economies and an active real estate market.
Jujiang Construction successfully obtained the Premium Class Certificate in January 2015 and was the only construction company in Zhejiang Province holding both the Premium Class Certificate and the Engineering Design Certificate as of 30 June 2015. The Group is thus able to provide fully-integrated construction solutions, which consist of construction contracting and design, survey and consultancy services for building construction projects of all types and scales nationwide. The Group is able to charge premium rates for its services and capture business opportunities.
Jujiang Construction's track record of high-quality, timely and safe construction contracting services has enabled the Group to establish strong relationships with long-term customers. The Group's well-recognized brand and reputation enhance its ability to win construction projects and create business opportunities.
The Group has been devoted to research and development. Its technology centre is the first provincial-level research facility in Jiaxing. As at the latest practicable date, the Group has successfully developed a total of 26 national-level and provincial-level construction process methodologies, as well as owned 22 patents and had seven patent applications under review in China.
Future Prospects
Looking forward, the Group intends to pursue the following strategies:
(1) Provide complete construction solutions for larger-scale and more complex construction projects
As of 30 June 2015, the Group was the only holder of both the Premium Class Certificate and Engineering Design Certificate in Zhejiang Province, and one of the few in China. This enables Jujiang Construction to undertake larger-scale and more complex construction projects to enhance profitability.
(2) Develop business opportunities to undertake build-transfer (BT) and public-private partnership (PPP) projects
An increasing number of infrastructure projects in China are expected to be completed on a BT or PPP basis in the coming years. Jujiang Construction intends to leverage its strong relations with the local Jiaxing government and its track record of high-quality public works construction projects to win such projects. BT and PPP will enhance the Group's profitability and brand recognition.
(3) Actively participate in overseas construction and infrastructure projects
Jujiang Construction obtained the Overseas Contracting Certificate in 2010, allowing the Group to undertake construction projects overseas. The Group intends to conduct overseas business development and participate in overseas construction and infrastructure projects more actively as increased outbound investment and business activities are expected in line with the Belt and Road Initiative recently announced by the PRC Government. Jujiang Construction plans to capitalize on such an opportunity to expand overseas and augment its reputation and brand recognition.
Mr. Lv Yaoneng, Chairman, Executive Director and General Manager of Jujiang Construction, said, "Our goal is to continue to capture greater market share in Zhejiang province and in other provinces and regions in China, as well as expand our presence overseas to become a leading construction contracting and design company in selected regions."
About Jujiang Construction Group Co., Ltd.
The Group is principally engaged in construction contracting business. It also provides design, survey and consultancy services to customers, as well as manufactures civil defense products. The Group is principally engaged in undertaking construction projects as a general contractor. During the Track Record Period, the Group completed a total of 550 construction projects, including residential construction projects, commercial construction projects, industrial construction projects and public works construction projects. The Group's construction projects were mainly located in Zhejiang Province, others were located in Jiangsu, Anhui, Shandong and Liaoning Provinces. According to Ipsos, Jujiang Construction was the largest construction company in Jiaxing, Zhejiang Province in terms of output value in 2014, holding a market share of 10.4%.
