Xing Rong invests in the purchase of water supply business

The only day of suspension of investment (000598, the former closing price of 19.55 Yuan) announced its non-public offerings today. The company intends to raise funds through additional funding of about 2.366 billion yuan, for the acquisition of the holding shareholder Hing Yung Group Holdings Chengdu Water Limited Liability Company (hereinafter referred to as water company) 100% Equity.　　After the completion of the acquisition, Hing Yung Investment will enter the water supply industry for the first time, so as to create a water supply and sewerage integration on the road to a further step forward. Additional schemes show that the company intends to issue no more than 140 million shares to no more than 10 specific investors, including the top 20 shareholders (excluding Hing Yung Group) and other institutional investors, at a price not less than 16.90 yuan/share, and about 2.366 billion yuan will all be used to acquire 100% per cent of the water company.　　At present, the two sides have not yet made a specific assessment of the financial situation of the underlying assets. At present, the main business of Xing Rong investment for sewage treatment, the company 2010 years report that the sewage treatment services income of 288 million, accounting for more than 99% of the total income, relatively single source of revenue. Holding Xing Rong investment 52.27% stake Hing Rong Group is Chengdu Water Faucet, this will tap water company 100% Equity injected into the listed companies, in order to realize the Hing Rong Group's water assets of the overall listing.　　Xing Rong investment access to water companies, the company's business will be extended to the field of water supply, so that the company is engaged in collecting raw water collection, water production, transmission and distribution, water, sewage treatment and other business as a whole, the formation of integrated water supply and drainage group of the complete framework. The water price of Chengdu has been in the lower level in the capital cities of the five provinces of the west, and the price adjustment lags behind. There has been no adjustment from April 2005 to the end of 2009. During the rising cost, water company's main business profitability is not strong, the bulletin shows that the water company 2009 to achieve operating income of 831 million yuan, and operating profit of 332,200.　　Water companies, such as financial subsidies and other operating income of 162 million yuan, the 2009 to achieve net profit of about 136 million yuan. However, this situation is expected to change. The recent policy in Chengdu, the central city residents living water and special water prices have been adjusted, the rise in water prices will greatly enhance the profitability of the water company, second, the expansion of water supply area will increase the company's income. According to the "Chengdu Water Supply Plan", the current poor or low guarantee rate of the districts and counties no longer build new water plants, and no longer large-scale expansion of existing water plants, small town water plants in the long term gradually closed, these areas of future water supply increase demand mainly through the water company to meet. Water supply area will be greatly expanded; Finally, the water company and the Chengdu Municipal government signed the "Bot Supplementary Agreement", the purchase of water will be reduced to the Chengdu municipal government, to ensure that the water company as a market-oriented operation of the identity of the running water company through the market operation to obtain reasonable profits, No longer bear the loss of Non-market.