Hongcheng Environmental Protection Technology Co., Ltd. (hereinafter referred to as 'Hongcheng Environmental Protection Technology') was successfully listed on November 12, 2021, with a global issuance of 250 million shares at a price of HK$1.02 per share.
During the Hong Kong listing process, Frost & Sullivan mainly undertook the following tasks: helping the company accurately and objectively understand its positioning in the target market, using objective market data to discover, support, and highlight the company's competitive advantages, assisting the company, investment banks, and other intermediaries in completing relevant parts of the prospectus (such as the overview, competitive advantages and strategy, industry overview, business, and other important sections), facilitating communication with the Hong Kong Stock Exchange and investors, helping investors quickly understand the market ecosystem and competitive landscape, and assisting the company in completing feedback on various industry-related issues from the Hong Kong Stock Exchange.
Overview of China's Mining Solid Waste Treatment Market
Mine solid waste refers to waste rocks, tailings, waste residues, and hazardous waste generated during mining and beneficiation processes. The accumulation of large amounts of mine solid waste can pollute land and cause disasters such as landslides and mudslides. Hazardous waste discarded into the environmental system (including harmful elements such as arsenic and cadmium) can pose direct harm to human health. To eliminate pollution caused by mine solid waste, the government is currently promoting comprehensive utilization of mine solid waste. There are three common methods for treating mine solid waste: resource utilization, incineration disposal, and landfill disposal.
The total generation of solid waste from mines in China increased from 30.012 billion tons in 2015 to 31.451 billion tons in 2020, with a compound annual growth rate of 0.9% from 2015 to 2020. With further development of the mining industry and industrial upgrading, it is expected to reach 36.968 billion tons by 2025, with a compound annual growth rate of 3.3% from 2020 to 2025. The treatment volume of solid waste from mines in China increased from 13.12 billion tons in 2015 to 14.792 billion tons in 2020, with a compound annual growth rate of 2.4% from 2015 to 2020. Driven by continuously strengthened policies, the implementation of environmental protection supervision, and the effective utilization of solid waste resources, the treatment volume of solid waste from mines is expected to reach 20.65 billion tons, with a compound annual growth rate of 6.9% from 2020 to 2025, a growth rate higher than the total generation.
China's solid waste generation and treatment volume in mining
Forecast 2015 - 2025
Source: Frost & Sullivan report
Analysis of the Hazardous Waste Treatment Market in China and Shandong Province's Gold Mines
Most gold mines in China directly cyanide process their ores without beneficiation, producing large amounts of gold mine cyanide tailings and heap leach tailings. Considering that cyanide leaching residues were included in the national hazardous waste list on August 1, 2016, the market for gold mine hazardous waste treatment was relatively small because it did not receive much attention before 2017. After the implementation of policies, environmental protection requirements have become increasingly strict, driving market growth. The markets for gold mine hazardous waste treatment in Shandong Province and China increased from RMB 5.95 million and RMB 1.051 billion in 2015 to RMB 12.888 billion and RMB 19.054 billion in 2020, with compound annual growth rates of 85.0% and 78.5% from 2015 to 2020, respectively.
In regions outside Shandong Province, due to different beneficiation technologies, most of the hazardous waste from gold mines is cyanide tailings and heap leaching tailings. These hazardous wastes are mainly stored in tailings ponds, and due to their low recycling value, the proportion of treatment is very low. Even under the pressure of strict environmental protection requirements, it is expected that gold mining companies will dispose of a certain amount of hazardous waste through underground landfilling on their own. Coupled with the high utilization rate of hazardous waste in Shandong Province, the market for hazardous waste treatment in gold mines in Shandong Province accounts for a significant proportion of the Chinese market. With the continuous increase in hazardous waste output and increasingly stringent environmental protection requirements, it is expected that the market for hazardous waste treatment in gold mines in Shandong Province and China will further increase to RMB 29.212 billion and RMB 45.69 billion by 2025, with compound annual growth rates of 17.8% and 19.1% from 2020 to 2025, respectively.
Total revenue from the hazardous waste treatment market in China's gold mining industry
Forecast 2015-2025
Source: Frost & Sullivan report
Competitive landscape of the hazardous waste treatment market for gold mines in China and Shandong Province
In 2020, the top five participants accounted for about 67% of the total revenue of China's gold mine hazardous waste treatment market. In terms of revenue, Hongcheng Environmental Protection Technology ranked third among China's largest hazardous waste treatment companies, with a revenue of RMB 1.905 billion in 2020, accounting for 10% of the total revenue in the Chinese market. The hazardous waste treatment market in Shandong Province is relatively concentrated. In 2020, the top five participants accounted for about 65% of the total revenue in Shandong's market. In terms of revenue, Hongcheng Environmental Protection Technology was the second largest hazardous waste treatment company in Shandong Province, with a revenue of RMB 1.905 billion in 2020, accounting for 15% of the total revenue in Shandong.
Based on processing volume, Hongcheng Environmental Protection Technology is China's largest company for treating hazardous waste from gold mines, with a processing capacity of about 11 million tons, accounting for about 18% of China's total processing volume in 2020.
Top 5 gold mine hazardous waste treatment enterprises (by treatment volume)
China, 2020
Source: Frost & Sullivan report
Top 5 gold mine hazardous waste treatment enterprises (by treatment volume)
Shandong, 2020
Source: Frost & Sullivan report
Frost & Sullivan has extensive research experience in the environmental protection industry, assisting well-known enterprises in successfully accessing the capital market. Successful listing cases include Dehe Group (0368.HK), Hygieia Group (1650.HK), Yongshun Holdings (6812.HK), Beikong Urban (3718.HK), Taizhou Water Affairs (1542.HK), Beng Soon (1987.HK), Zhuangchen Holdings (1955.HK), Jinmaoyuan Environmental Protection (6805.HK), Everbright Water Affairs (1857.HK), Weigang Environmental Protection (1845.HK), Shanghai Industrial Environment (0807.HK), Boqi Environmental Protection (2377.HK), Ligo Holdings (8472.HK), Everbright Green Environmental Protection (1257.HK), Wancheng Global (8309.HK), Dianchi Water Affairs (3768.HK), Xinglu Water Affairs (2281.HK), Canghai Holdings (2017.HK), Yongshun Group (8421.HK), Datang Environment (1272.HK), Peiran Environmental Protection (8320.HK), Jinjiang Environment (CJE.SP), Kangda International Environmental Protection (6136.HK), Haoze Water Purification (2014.HK).
Recommended Reading
19. Frost & Sullivan assisted Yongshun Holdings Hong Kong Limited in successfully listing on the Hong Kong Stock Exchange(8421.HK)
22. Frost & Sullivan assists Jinjiang Environment in successfully going public in Singapore (CJE.SP)
