Hunan Junxin Environmental Protection Co. Ltd. (301109.SZ) has refilled its prospectus with the Hong Kong Stock Exchange to pursue an overseas listing, following regulatory approval from the China Securities Regulatory Commission late last month. The waste management specialist intends to use the proceeds to expand its high-margin waste-to-energy operations beyond its current domestic stronghold in Changsha, targeting emerging markets in Central Asia.

The refiling follows an earlier submission that expired. Domestic investment banks CICC and Citic Securities are acting as joint sponsors for the listing, suggesting a potential raise of $100 million or more. This move complements the company’s existing listing on the Shenzhen Stock Exchange.

Financial Performance And Monopoly Position

Junxin operates an effective local monopoly over municipal solid waste treatment in Changsha, Hunan province, handling all waste from the city’s six main districts under multi-decade government contracts. This dominant position shields the company from the price wars and overcapacity issues affecting coastal Chinese operators.

The acquisition of Hunan Renhe Environment in late 2024 integrated midstream urban logistics with Junxin’s downstream incineration hub, boosting top-line growth.

Revenue rose 31% to 2.41 billion yuan in 2024, driven by the Renhe acquisition, and grew another 13% to 2.73 billion yuan last year. The company reported a net profit of 716.6 million yuan last year, translating to a net profit margin of 26%. Green energy sales account for more than half of total revenue, with electricity generated from waste burning sold to the state grid.

What the Numbers Show

The data reveals a significant divergence between revenue growth drivers and operational stability. While the 31% revenue jump in 2024 was acquisition-led via Hunan Renhe, the subsequent 13% organic growth in FY25 alongside a stable 26% net profit margin indicates successful integration of midstream logistics with downstream power generation. This vertical integration allows Junxin to maintain utility-like profitability despite the capital-intensive nature of waste-to-energy operations.

Overseas Expansion Strategy

Facing structural saturation in China’s domestic waste-to-energy market, Junxin is leveraging the Belt and Road Initiative to export its business model. The company has invested $95 million to construct a waste-to-energy plant in Bishkek, Kyrgyzstan, marking Central Asia’s first major facility of its kind. Additional project agreements have been signed in Osh and Karakol, with a preliminary framework exploration agreement in Kazakhstan.

Junxin currently trades at a trailing price-to-earnings ratio of about 14 on the Shenzhen exchange, a premium over peers like China Everbright Environment Group (0257.HK), reflecting its superior margins and localized monopoly. The company pays out more than two-thirds of its net profit as dividends, appealing to investors seeking stable cash flow.