New Stock News | Five Continents Energy Plans for Hong Kong IPO, CSRC Requires Supplemental Explanation on Equity Structure, Compliance Operations, etc.

On September 27, the China Securities Regulatory Commission disclosed the requirements for supplementary materials for overseas issuance and listing filing (from September 20, 2024, to September 26, 2024), in which it mentioned the requirement for Wuzhou Energy to provide further clarification on matters such as equity structure and compliance operations. According to the disclosure by the Hong Kong Stock Exchange on June 27, Wuzhou Energy Holdings Limited (Wuzhou Energy) submitted an application for listing on the main board of the Hong Kong Stock Exchange, with Guotai Junan International as its sole sponsor. Specifically, the China Securities Regulatory Commission publicized the following requests for Wuzhou Energy to provide supplementary explanations and for lawyers to verify and provide clear legal opinions: 1. Regarding the equity structure. Please explain: (1) the specific situation of the acquisition of Yuling County Huiyuan Gas Co., Ltd. by Henan Wuzhou Gas, including pricing basis, tax payment situation, etc.; (2) whether the acquisition of Changge Wuzhou Gas by Wuzhou Energy in Hong Kong complies with the "Regulations on the Acquisition of Domestic Enterprises by Foreign Investors", and whether necessary procedures for foreign investment registration have been completed; (3) the conclusive opinions on the legality and compliance of the offshore structure construction and return investment involving foreign exchange registration, overseas investment, foreign investment, tax payment, and other regulatory procedures. 2. Regarding compliance operations. Please explain: (1) whether the land use involved in projects under construction or completed is legal and compliant, whether there are substantial obstacles to changing the land use, and provide relevant basis; (2) reasons for some projects under construction not completing relevant safety procedures, and provide conclusive opinions on their legality and compliance. According to the prospectus, based on data from Frost & Sullivan, in 2023, Wuzhou Energy was the largest natural gas distributor in Xuchang, a major prefecture-level city in Henan Province, based on pipeline natural gas sales to end users under exclusive franchise rights. As of December 31, 2023, the company owned the second longest natural gas pipeline in Henan Province. Since its establishment in 2001, it has been operating in the natural gas industry in Henan Province for over 20 years. As of December 31, 2023, most of Wuzhou Energy's revenue comes from selling pipeline natural gas to end users through urban pipeline networks in the franchise area under exclusive franchise rights. According to the franchise rights (Changge franchise rights, Xuchang franchise rights, and Yuling franchise rights), the company has the exclusive rights to sell and distribute pipeline natural gas in the franchise area, as well as to build urban pipeline networks, for a period of 30 years, with expiration dates in May 2036, September 2041, and March 2042 respectively.