DUOYUAN GLOBAL WATER INC.

DUOYUAN GLOBAL WATER INC.

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Company Overview

Business Summary
The Company, through its subsidiaries, engages in the manufacture and sale of water treatment equipment in the People’s Republic of China.
Description and history
The Company, indirectly wholly owned by Wenhua Guo, was incorporated under the laws of the British Virgin Islands on June 21, 2007, as a holding company to acquire Duoyuan Clean Water Technology Industries (China) Co., Ltd. (“Duoyuan Beijing”) and Duoyuan Water Treatment Equipment Manufacturing (Langfang) Co., Ltd. (“Duoyuan Langfang”) from Hydroresource Technology Limited (“HTL”), a company solely owned by Wenhua Guo which owned 100% of the equity interest of Duoyuan Beijing and 100% of the equity interest of Duoyuan Langfang. Under its Memorandum of Association, the Company is authorized to issue a maximum of 1,500,000,000 ordinary shares with a par value of $0.000033 (See Note 3).
Duoyuan Beijing and Duoyuan Langfang became the wholly-owned subsidiaries of the Company (collectively referred to as the “Group”) on September 3, 2007 and November 29, 2007, respectively. The Company conducts various administrative functions for the Group.
The Group’s business operations are all conducted in the People’s Republic of China (“PRC”).
Duoyuan Beijing is located in Beijing and was first established on April 7, 1992, and approved by the People’s Government of Chongwen District, Beijing, to do business in China. Duoyuan Beijing’s principal business activities include the marketing, sales and service of water environment protection equipment and water treatment products.
Duoyuan Langfang is located in the city of Langfang, which is in the province of Hebei, China. Its principal business activities include the development, manufacturing and after-sale service of water environment protection equipment and water treatment equipment. Duoyuan Langfang was established on June 22, 2000, and approved by the Management Committee of the Langfang Economic & Technical Development Zone to do business in China.
Huanan Duoyuan Water Supply Co., Ltd. (“Duoyuan Huanan”) is located in Huanan County in the province of Heilongjiang, China. It is primarily engaged in the construction, operations and service of local tap water supplying systems. Registered with Huanan County Administration for Industrial and Commerce, Duoyuan Huanan was established on November 15, 2002. On July 1, 2007, Duoyuan Beijing and Duoyuan Langfang sold their respective 50% ownership interests in Duoyuan Huanan to Duoyuan Asian Water Inc., wholly owned by Wenhua Guo, thereby making Duoyuan Huanan a discontinued operation for all periods presented (see Note 17).
On October 16, 2009, Duoyuan Global Centrifuge Machinery Manufacturing (China) Co., Ltd. (“Duoyuan Centrifuge”) was incorporated at the Beijing Administration for Industry and Commerce as a wholly-owned subsidiary of the Company. It has not yet begun operations. Its contemplated principal business activities include the development, manufacturing and after-sale service of sludge screw, industrial centrifuge and other centrifuge equipment.
On October 23, 2009, Duoyuan Global Water Conservation Equipment (China) Co., Ltd. (“Duoyuan Conservation”) was incorporated at the Beijing Administration for Industry and Commerce as a wholly-owned subsidiary of the Company. It has not yet begun operations. Its contemplated principal business activities include the development, manufacturing and after-sale service of water conservation equipment for commercial and domestic use.

On November 3, 2009, Langfang Duoyuan Aerator System Equipment Manufacturing Co., Ltd. (“Duoyuan Aerator”) was incorporated at the Langfang Administration for Industry and Commerce as a wholly-owned subsidiary of the Company. It has not yet begun operations. Its contemplated principal business activities include the development, manufacturing and after-sale service of various types of aerators.
On June 29, 2009, the Group completed an initial public offering (“IPO”) of 5,500,000 American Depositary Shares (“ADSs”) representing 11,000,000 ordinary shares plus an over-allotment of 825,000 ADSs representing 1,650,000 ordinary shares at a price of $16.00 per ADS. This represented 28.9% of the 43,702,631 total outstanding shares following the IPO. The net proceeds from the IPO, after deducting a total of RMB59,162,673 ($8,667,381) of underwriting discounts, commissions and offering expenses, totaled RMB637,583,033 ($93,406,442).
The Company., through its subsidiaries, engages in the manufacture and sale of water treatment equipment in the People’s Republic of China. Its product categories include circulating water treatment equipment, including electronic water conditioners, automatic filters, circulating water central processors, cyclone filters, and water softeners, which are used in the process of treating water and removing buildup in circulating water systems; water purification equipment that use ultraviolet, ozone, membrane-based, and electrodeionization technologies in the process of treating and purifying water for various applications and end-user customers, including residential communities and commercial businesses; and wastewater treatment equipment, including grit separators, microporous aerators, and belt-type thickener-filter press mono-block machines, which are used in the process of treating wastewater, such as municipal sewage, and industrial and agricultural wastewater. The Company’s customers primarily consist of wastewater treatment plants, water works facilities, manufacturing plants, commercial businesses, residential communities, and individual customers. It sells its products through distributors.
The Group is engaged in the manufacture and distribution of water environment protection equipment and water treatment products. The Group has two reportable segments, manufacturing and distribution, based on the type of business process. Duoyuan Langfang manufactures water environment protection equipment and water treatment products and Duoyuan Beijing markets and distributes those products. Each reportable segment derives its revenues from the sale of its products: Duoyuan Langfang sells its products to Duoyuan Beijing and Duoyuan Beijing sells its products to distributors. Intersegment sales are eliminated in the consolidated financial statements

The Company’s common stock is trading on the New York Stock Exchange on June 24, 2009 under the symbol “DGW’

The Compnay was founded in 1992 and is headquartered in Beijing, the People’s Republic of China.

Business Line

Subsidiary

Advisor
GRANT THORNTON
IPO date
6/24/2009
US SIC Code
3559
Company Address

City province or state postal code

Phone: +86 86 10 6021 2222
Fax: +86 86 10 6021 2164
Country address: VIRGIN ISLANDS (BRITISH)
Website url: www.duoyuan-hq.com