China Water Pollution Play: Duoyuan Global Water IPO Coming

The growth in China over the past 10 years or so has been staggering and despite a global economic crisis, the economy is still growing around 6% (so they say). With an attitude of growth at any cost and a mass migration to China cities, you have to assume that water pollution and scarcity could very well choke the economy in the coming years.

Guo Youzhi, general secretary of the China Desalination Association, said that only 20 percent of industrial wastewater in the country is efficiently re-utilized and 80 percent is being simply discharged.

Duoyuan Global Water (DGW) which IPOs next week aims to alleviate some of the concern. The company distributes its water treatment equipment which includes filtration, water softening, water sediment separation, disinfection and reverse osmosis throughout 28 Chinese provinces. The company is growing quickly with revenues rising 40% and net income jumping 63% over 2007 levels.. The company cites population growth and industrialization as factors that are driving demand for water treatment in the country.

The IPO is expected to price on June 23rd and begin trading the next day on the NYSE under the ticker symbol “DGW”. The company plans to sell 5 million ADRs between $13 - 15/share with the proceeds being used to improve and build new facilities including research facilities as well as create new products.

Get the prospectus and road show video for Duoyuan Global Water (DGW) here

Comments

[waterpros:]

Watch CLWT ahead of this IPO. This is the most direct way to play this on the cheap. With a market cap of only $15mil and $10mil in cash, CLWT can turn out to be a multibagger if DGW lives up to the hype, and right now the hype is pretty intense.

Jun 19 03:46 PM

[The Geoffster:]

Any thoughts on PHO?

Jun 20 11:08 PM