IPO FILING: Douyuan, A Chinese Water Play (DGW)

Duoyuan Global Water Inc. has filed as a foreign issuer to come public in the U.S. via an initial public offering.  The proposed offering is for up to $86,250,000 via the sale of 5,000,000 American Depositary Shares which represent 10,000,000 Ordinary shares.  The stock has the proposed ticker of “DGW” on NYSE, and an initial price range was set at $13.00 to $15.00.

Piper Jaffray is listed as the lead underwriter and co-managers are listed as Oppenheimer and as Janney Montgomery Scott.  The underwriters have a 30-day option to purchase up to 750,000 additional ADS’s to cover over-allotments, if any.

The Chinese company was founded in 1992 and is a Chinese water play, although it was incorporated on June 21, 2007 under the laws of the British Virgin Islands and act as a holding company.  Its markets are in water treatment equipment and are in filtration, water softening, water-sediment separation, aeration, disinfection and reverse osmosis.

Net proceeds are earmarked to improve and upgrade existing manufacturing facilities and production lines, to build new manufacturing facilities and production lines to produce new water treatment products, to build a research and development laboratory, to fund potential acquisitions, and for general corporate purposes.

In 2008, its revenues were $86.742 million, with a $25.853 million operating income and net income of $19.577 million.

JON C. OGG
June 2, 2009