Chinese Environmental Protection Firm JDL Eyes $267m In STAR Market IPO

Jiangxi JDL Environmental Protection, a specialist in water pollution control management and other environmental protection services, has kicked off its subscription exercise in an initial public offering (IPO) with a target to raise 1.8 billion yuan ($267 million) on Shanghai’s Nasdaq-styled STAR Market.

The company is offering 69 million common shares at 25.84 yuan ($3.9) apiece. The shares have been oversubscribed 3,952 times, according to a company filing with the bourse.

JDL will use the IPO proceeds for the construction of a research centre, and an operation centre. A part of the money will also be used as working capital.

Shanghai-based Shengang Securities is the principal underwriter for the deal, while state-owned China CITIC Group’s CITIC Securities serves as its joint sponsor. JDL will float the shares under the symbol “688057”.

JDL, which was founded by Zhimin Liao in Southeast China’s Jiangxi province, has been engaged in the environmental service business. Since its inception in 2004, it has provided proper sewerage solutions for households and industries.

The company is based in Nanchang city, and it has also set up a US-based subsidiary, JDL International Environmental Protection, to develop its overseas presence. 

According to its prospectus, its sales earnings recorded a surge during COVID-19 pandemic in 2020. JDL generated earnings of 512 million yuan ($76 million) in the first half of this year, a 19.51 per cent year-on-year growth. Besides, its net profit clocked 217 million yuan ($32 million), up 52.34 per cent compared to that of 2019.

The founder Liao will remain as the controlling shareholder and actual controller in JDL, bringing down its take from 61.24 per cent to 45.93 per cent. Chinese leading battery supplier Camel Group will remain the second-largest shareholder with 4.69 per cent equity interest. 

Camel had made an undisclosed investment in JDL in 2015. Subsequently, Pacific Securities had also exclusively poured 180 million yuan ($27 million) in JDL in 2017. Its early-stage investors also include Shenzhen Hongfu Ruiying Investment Management, Holch Capital, and Rockey Capital.