Core Viewpoint - Shenzhen Weite Environmental Technology Co., Ltd. has successfully passed the IPO review on September 12, 2023, aiming to raise approximately 169 million yuan [1] Company Overview - Weite Environmental specializes in providing professional services for drainage pipeline detection, assessment, design, non-excavation repair, and smart operation, utilizing advanced technologies and self-developed systems [1] IPO Details - The IPO application was accepted in June 2023, followed by an inquiry phase in July 2023 [1] - The company plans to raise around 169 million yuan through this IPO [1] Regulatory Requirements - The listing committee requested Weite Environmental to explain the competitive advantages of its core products, such as the Sugo mat and lining technology, in comparison to domestic and international competitors [1] - The committee also asked for clarification on the reasons and rationality behind the inconsistent operating performance trends with comparable companies in 2024, as well as the sales revenue collection situation during the reporting period [1]

Core Viewpoint - Shenzhen Weite Environmental Technology Co., Ltd. has been approved for IPO on the Beijing Stock Exchange, marking the 49th company to pass the review this year, with a total of 21 companies approved by the Beijing Stock Exchange [1]. Company Overview - Weite Environmental specializes in providing professional services for drainage network detection, assessment, design, non-excavation repair, and smart operation using advanced technologies and systems developed in-house [1]. - The company has no controlling shareholder, with actual control held by Wang Hongpeng and Wang Yaxin [1]. IPO Details - The company plans to issue up to 19.29 million shares (including the base amount, excluding over-allotment) and up to 22.18 million shares (if the over-allotment option is fully exercised) [1]. - The underwriter for this IPO is Founder Securities, marking its first successful IPO project of the year [1]. Fundraising Purpose - The company aims to raise approximately 168.54 million yuan for regional operation center construction, technology research and development center construction, and to supplement working capital [2]. Review and Inquiry - No specific review opinions were noted during the meeting [3]. - Key inquiries included the company's core technological competitiveness and the sustainability of its performance growth, particularly in relation to comparable companies [4].

Group 1 - Wite Environment is making a second attempt to list on the Beijing Stock Exchange (BSE) after a previous rejection in 2022, during which it reduced its fundraising target from 304 million yuan to 169 million yuan [1][4][12] - The company faced continuous inquiries from regulators regarding issues such as contract asset impairment and innovative characteristics throughout its application process [1][13] - The company’s main business consists of pipeline detection and repair, with a new segment in smart pipeline operation introduced in 2021, contributing less than 10% to revenue [14][22] Group 2 - The company reported significant revenue fluctuations from 209 million yuan in 2020 to 303 million yuan in 2022, with net profit changes of 88.09%, -42.13%, and 15.61% respectively [25][26] - The company attributes the revenue decline in 2021 to the impact of the pandemic on project acquisition and delays from local governments [26][29] - For 2023, the company projects revenue between 270 million yuan and 310 million yuan, with a net profit forecast of 43.5 million to 55.5 million yuan, indicating no significant risk of a downturn [27][29] Group 3 - The company’s core technology, the lining method, is recognized as a leading technique in the industry, with significant barriers to entry and a competitive edge over traditional construction methods [17][24] - The company has established a strong market position, ranking first in Guangdong province for non-excavation repair technology applications in municipal drainage networks [22][24] - The company’s proprietary product, the Sugo mat, has been certified to meet international advanced standards, providing a cost advantage over foreign competitors [19][22] Group 4 - The company has faced scrutiny regarding the adequacy of its impairment provisions for contract assets, particularly as the proportion of long-term contract assets has increased [31][32] - The company has clarified that long-term contract assets are primarily due to projects not yet reaching settlement conditions, and it has taken a cautious approach to impairment provisioning [31][32] - The company maintains that its revenue recognition practices are reasonable and aligned with contractual agreements, with no significant risks of long-term uncollectible accounts [29][31]

Core Viewpoint - Weite Environment, a leader in the non-excavation repair of municipal drainage networks, is leveraging national policies and its strong project experience, technological innovation, and quality customer resources to achieve stable growth in performance [1][2]. Group 1: Market and Policy Environment - The urbanization process in China has led to a focus on urban environmental quality, which is now a key factor in assessing comprehensive urban competitiveness and high-quality development [2]. - The Chinese government has issued at least 14 policies since 2024 to support the renewal and smart operation of drainage networks, creating a favorable policy environment for the industry [2][6]. - The market for drainage network updates is projected to reach trillions of yuan, with a need to renovate nearly 600,000 kilometers of underground pipelines over the next five years, requiring an investment of 4 trillion yuan [6]. Group 2: Technological Innovation - Weite Environment has developed a strong portfolio of core technologies, including the lining method, short pipe lining repair technology, and UV curing repair technology, which address issues of traffic disruption and environmental pollution associated with traditional excavation methods [4]. - The company holds 83 patents and 72 software copyrights, showcasing its commitment to innovation and technological advancement [4]. Group 3: Financial Performance - Weite Environment's revenue for 2022, 2023, and 2024 was 303 million yuan, 293 million yuan, and 330 million yuan, respectively, with net profits of 46 million yuan, 49 million yuan, and 53 million yuan, indicating a trend of stable growth [5]. - The company's operating cash flow improved significantly in 2024, turning from negative to positive, with net cash flow from operating activities recorded at 9.43 million yuan [8]. Group 4: Customer Base and Market Position - Weite Environment has established a strong customer base, serving major state-owned enterprises and construction companies, which enhances its market position and brand influence [4]. - The company ranks first in the non-excavation repair of municipal drainage networks in Guangdong Province and is among the top players nationwide [5]. Group 5: Future Outlook - With ongoing policy support, technological innovation, and a robust customer base, Weite Environment is well-positioned to strengthen its competitive advantage and achieve sustainable growth [7][9].