Registration Prospectus (Clean)(131010)

8/8/2019 Registration Prospectus (Clean)(131010)

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Leading and established management team with proven track record of deliver

sustainable growth and profitability

Xie Ding Zhong, Executive Chairman & Chie Executive Oicer,

accumulated more than 40 years o experience in the chemical indus

Integrated business model anchored on strong R&D capabilities and registepatents for our key technologies.

Organic growth by dedicated key management team wit

average o approximately 32 years o relevant proessiexperience which has been working together since inceo Anchun

Proessionally-managed by industry leaders with extenetwork, experiences, market knowledge to deliver sustaingrowth and prof tability

Integrated business model provides operational efficiency

Project-driven and advance payment business model reduces inventory and credit risks

Margin-protected through inter-weaving operational efficiency and proprietary and patented technologie

rom L to R: Dai Feng Yu, Liang Gong Zeng, Xie Ding Zhong,

Li Chun Yang, Li Bin, Leow Wei Chang

Steady growth in production volume and capacity of ammonia and methanol

the PRC is expected to continue The PRC needs to feed 21% of the worlds population with only 9% of global arable area. Use of fertiliser is cruc

ensuring the PRCs food security.

Persistent and stable increase in demand for fertiliser to expand crop production and in other industry useammonia.

Methanol is an important feedstock to the petrochemical and chemical industries. The PRCs demand for ensecurity necessitate the development of alternative fuel.

Increasing use of dimethyl ether as alternative fuel for cooking and heating and methanol to ole fin process to proethylene and propylene, the top 2 petrochemical feedstock.

PROSPECTS

Existing producers required to increase capital expenditure to upgrade productfacilities

83.3% and 85.2% of the PRCs ammonia and methanol producers operate in inefficient plants producing less180kt/yr and 200 kt/yr respectively.

Coal-based ammonia and methanol synthesis technologies continue to be predomina

used in the PRC market


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CONTENTS

Page

1. CORPORATE INFORMATION ................................................................................................ 5

2. DEFINITIONS .......................................................................................................................... 8

3. GLOSSARY OF TECHNICAL TERMS .................................................................................... 15

4. CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS .......................................... 17

5. INDUSTRY AND MARKET DATA ............................................................................................ 18

6. SELLING RESTRICTIONS ...................................................................................................... 19

7. DETAILS OF THE INVITATION................................................................................................ 20

LISTING ON THE SGX-ST ...................................................................................................... 20INDICATIVE TIMETABLE FOR LISTING.................................................................................. 24

8. THE INVITATION...................................................................................................................... 25

9. PLAN OF DISTRIBUTION ...................................................................................................... 26

10. CLEARANCE AND SETTLEMENT ........................................................................................ 28

11. USE OF PROCEEDS AND LISTING EXPENSES .................................................................. 29

12. MANAGEMENT, UNDERWRITING AND PLACEMENT ARRANGEMENTS.......................... 31

13. PROSPECTUS SUMMARY...................................................................................................... 33

OUR COMPANY ...................................................................................................................... 33

OUR BUSINESS ...................................................................................................................... 33

OUR COMPETITIVE STRENGTHS ........................................................................................ 33

OUR FINANCIAL PERFORMANCE ........................................................................................ 34

OUR BUSINESS STRATEGIES AND FUTURE PLANS.......................................................... 34

14. ISSUE STATISTICS.................................................................................................................. 35

15. RISK FACTORS ...................................................................................................................... 37

RISKS RELATING TO OUR BUSINESS OR OUR INDUSTRY .............................................. 37

RISKS RELATING TO PRC...................................................................................................... 43

RISKS RELATING TO AN INVESTMENT IN OUR SHARES .................................................. 46

16. EXCHANGE RATES ................................................................................................................ 48

17. DIVIDEND POLICY .................................................................................................................. 49

18. CAPITALISATION AND INDEBTEDNESS .............................................................................. 50

19. DILUTION ................................................................................................................................ 52

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20. SHARE CAPITAL .................................................................................................................... 55

21. RESTRUCTURING EXERCISE .............................................................................................. 58

22. GROUP STRUCTURE.............................................................................................................. 63

23. INDUSTRY OVERVIEW............................................................................................................ 64

24. HISTORY AND BUSINESS...................................................................................................... 73

HISTORY .................................................................................................................................. 73

BUSINESS OVERVIEW............................................................................................................ 76

COMPETITIVE STRENGTHS.................................................................................................. 78

OUR INTEGRATED BUSINESS MODEL ................................................................................ 82

OUR CORE PRINCIPLES OF PRODUCTION EFFICIENCY, ENERGY SAVING AND

ENVIRONMENTAL PROTECTION .......................................................................................... 83OUR VALUE CHAIN ................................................................................................................ 85

OUR CHEMICAL SYSTEMS AND COMPONENTS AND MANUFACTURING PROCESS .... 88

OUR CATALYSTS AND MANUFACTURING PROCESS.......................................................... 91

PRODUCTION FACILITIES, EQUIPMENT AND CAPACITY .................................................. 92

QUALITY CONTROL................................................................................................................ 94

SALES AND MARKETING ...................................................................................................... 96

AWARDS AND ACCREDITATION ............................................................................................ 97

OUR MAJOR CUSTOMERS .................................................................................................... 99

OUR MAJOR SUPPLIERS ...................................................................................................... 101

RESEARCH AND DEVELOPMENT ........................................................................................ 103

INTELLECTUAL PROPERTY .................................................................................................. 105

PROPERTIES AND FIXED ASSETS ...................................................................................... 107

STAFF TRAINING .................................................................................................................... 108

INSURANCE ............................................................................................................................ 109

PERMITS, APPROVALS, CERTIFICATIONS & GOVERNMENT REGULATIONS .................. 109

COMPETITION ........................................................................................................................ 112

25. SELECTED FINANCIAL INFORMATION ................................................................................ 113

BASIS OF PREPARATION OF OUR GROUPS COMBINED FINANCIAL STATEMENTS...... 113

OPERATING RESULTS OF OUR GROUP .............................................................................. 114

FINANCIAL POSITION OF OUR GROUP .............................................................................. 115

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26. MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS ANDFINANCIAL POSITION ............................................................................................................ 116

OVERVIEW .............................................................................................................................. 116

REVIEW OF RESULTS OF OPERATIONS.............................................................................. 126

REVIEW OF PAST FINANCIAL POSITION ............................................................................ 133

LIQUIDITY AND CAPITAL RESOURCES................................................................................ 135

MATERIAL CAPITAL EXPENDITURES AND DIVESTMENTS................................................ 139

MATERIAL COMMITMENTS AND CONTINGENCIES ............................................................ 139

FOREIGN EXCHANGE EXPOSURE ...................................................................................... 140

CHANGES IN ACCOUNTING POLICIES ................................................................................ 140

CREDIT MANAGEMENT.......................................................................................................... 140

INVENTORY MANAGEMENT .................................................................................................. 142

27. PROSPECTS, BUSINESS STRATEGIES AND FUTURE PLANS.......................................... 144

PROSPECTS............................................................................................................................ 144

TREND INFORMATION............................................................................................................ 147

BUSINESS STRATEGIES AND FUTURE PLANS .................................................................. 148

28. DIRECTORS, KEY EXECUTIVES AND EMPLOYEES .......................................................... 151

DIRECTORS ............................................................................................................................ 151

KEY EXECUTIVES .................................................................................................................. 157

MANAGEMENT REPORTING STRUCTURE .......................................................................... 159

SERVICE AGREEMENTS ........................................................................................................ 159

DIRECTORS AND KEY EXECUTIVES REMUNERATION .................................................... 160

EMPLOYEES............................................................................................................................ 160

CORPORATE GOVERNANCE ................................................................................................ 161

29. PRINCIPAL SHAREHOLDERS................................................................................................ 165

SHAREHOLDING AND OWNERSHIP STRUCTURE.............................................................. 165

TRUST AGREEMENTS............................................................................................................ 166

VENDORS................................................................................................................................ 168

MORATORIUM ........................................................................................................................ 169

30. INTERESTED PERSON TRANSACTIONS.............................................................................. 170

PAST INTERESTED PERSON TRANSACTIONS.................................................................... 170

ON-GOING INTERESTED PERSON TRANSACTIONS.......................................................... 171

REVIEW PROCEDURES FOR INTERESTED PERSON TRANSACTIONS .......................... 172

31. POTENTIAL CONFLICT OF INTERESTS .............................................................................. 173

32. GENERAL AND STATUTORY INFORMATION ...................................................................... 175

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33. APPENDIX A AUDITED COMBINED FINANCIAL STATEMENTS OF ANCHUNINTERNATIONAL HOLDINGS LTD. AND ITS SUBSIDIARIES FORTHE FINANCIAL YEARS ENDED 31 DECEMBER 2007, 2008 AND2009 .......................................................................................................... A-1

34. APPENDIX B UNAUDITED COMBINED FINANCIAL STATEMENTS OF ANCHUNINTERNATIONAL HOLDINGS LTD. AND ITS SUBSIDIARY FORTHE FINANCIAL PERIOD FROM 1 JANUARY 2010 TO 31 MARCH2010 .......................................................................................................... B-1

35. APPENDIX C TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION ANDACCEPTANCE .......................................................................................... C-1

36. APPENDIX D SELECTED EXTRACTS OF OUR ARTICLES OF ASSOCIATION.......... D-1

37. APPENDIX E DESCRIPTION OF RELEVANT PRC LAWS AND REGULATIONS ........ E-1

38. APPENDIX F DESCRIPTION OF SINGAPORE COMPANY LAW RELATING TOSHARES .................................................................................................... F-1

39. APPENDIX G DESCRIPTION OF SINGAPORE LAW RELATING TO TAXATION.......... G-1

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CORPORATE INFORMATION

Board of Directors : Xie Ding Zhong (Executive Chairman and CEO)Liang Gong Zeng (Executive Director and COO)Dai Feng Yu (Executive Director)Xie Ming (Non-Executive Director)Ma Ong Kee (Non-Executive Director)Andrew Bek (Alternate Director to Ma Ong Kee)Lee Gee Aik (Lead Independent Director)Tan Min-Li (Independent Director)Pan De Run (Independent Director)

Company Secretary : Tan Wei Shyan (LLB (Hons))

Our Registered Office : 1 Robinson Road#17-00 AIA TowerSingapore 048542

Telephone : (65) 6535 1944Facsimile : (65) 6535 8577

Our Principal Office and Contact Details : No.539, Lusong RoadChangsha National Hi-tech Industrial Development ZoneChangsha City, Hunan Province, PRC 410205

Telephone : (86) 731 8514 8687Facsimile : (86) 731 8514 8687

Share Registrar and Share Transfer : Boardroom Corporate & Advisory Services Pte. Ltd.

Agent 50 Raffles Place#32-01 Singapore Land TowerSingapore 048623

Manager : Kim Eng Corporate Finance Pte. Ltd.9 Temasek Boulevard#08-03 Suntec Tower TwoSingapore 038989

Underwriter and Placement Agent : Kim Eng Corporate Finance Pte. Ltd.9 Temasek Boulevard#08-03 Suntec Tower TwoSingapore 038989

Reporting Accountants and Auditors : Ernst & Young LLPOne Raffles QuayNorth Tower, Level 18Singapore 048583

(Partner-in-charge: Max Loh Khum Whai)(Certified Public Accountant, a member of the Institute ofCertified Public Accountants of Singapore)

Solicitors to the Invitation and : Shook Lin & Bok LLPLegal Advisers to our Company 1 Robinson Road

on Singapore Law #18-00 AIA TowerSingapore 048542

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Solicitors to the Manager, Underwriter : Wee Woon Hong & Associates LLCand Placement Agent 30 Raffles Place

#19-04 Chevron HouseSingapore 048622

Legal Advisers to our Company on : Haihua Yongtai Law FirmPRC Law Room 701,West Eton Place

69 Dongfang RdShanghai, PRC 200120

Principal Bankers : China Construction Bank (Furong Branch)No.218, Middle Furong Road, Changsha City, HunanProvince, PRC 410015

: China Construction Bank (South Shuyuan RoadBranch)No.38, South Shuyuan Road, Changsha City, HunanProvince, PRC 410009

: Industrial and Commercial Bank of China(Nanmenkou Branch)No.304 West Laodong Road, Changsha City, HunanProvince, PRC 410015

: Industrial and Commercial Bank of China (JinpengBranch)No.436 South Yinpen Road, Changsha City, HunanProvince, PRC 410013

: China Merchants Bank (Baisha Branch)No.388, Zhibang Garden, West Laodong Road,Changsha City, Hunan Province, PRC 410007

Receiving Banker : Citibank N.A., Singapore Branch3 Temasek Avenue#11-00 Centennial TowerSingapore 039190

Vendors : Vision Top Holdings LimitedC/o 10A Gemmill LaneSingapore 069251

Skyven Growth Opportunities Fund Pte. Ltd.2 Alexandra Road#06-02, Delta HouseSingapore 159919

Go Power Investments LimitedP.O.Box, 957 Offshore Incorporations CentreRoad Town, Tortola, British Virgin Islands

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Naresh Nanubhai DesaiC/o 30 Robinson Road#13-05 Robinson TowersSingapore 048546

Quek Yiang Hang83 Meyer Road

20-02, Meyer ParkSingapore 437910

Wong Chao Hsiung50 Hume Avenue#04-08, SummerhillSingapore 596229

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DEFINITIONS

In this Prospectus, the accompanying Application Forms and, in relation to the Electronic Applications,the instructions appearing on the screens of the ATMs of Participating Banks, the IB websites of therelevant Participating Banks, unless the context otherwise requires, the following definitions applythroughout where the context so admits:-

Companies within our Group

Company or Anchun : Anchun International Holdings Ltd.

Group : Our Company and our Subsidiary following the completion of theRestructuring Exercise

Hunan Anchun or Subsidiary : Hunan Anchun Advanced Technology Co., Ltd., a wholly-owned subsidiary incorporated in the PRC of

our Company

Other Companies, Organisations and Agencies

Able Gallery : Able Gallery Limited

Ace Sense : Ace Sense Holdings Limited

Authority : Monetary Authority of Singapore

CDP : The Central Depository (Pte) Limited

China XLX : China XLX Fertiliser Ltd.

CNCIC : China National Chemical Information Centre

Dawn Vitality : Dawn Vitality International Limited

Giant Yield Global : Giant Yield Global Limited

Go Power : Go Power Investments Limited

Haihua Yongtai : Haihua Yongtai Law Firm

Inventive Result Enterprises : Inventive Result Enterprises Limited

ISO : International Organisation for Standardization, a worldwidefederation of national standards bodies from more than 140

countries, whose mission is to develop industrial standards thatfacilitate international trade

Jingtian Gongcheng : Jingtian & Gongcheng Attorneys at Law

Manager, Underwriter or : Kim Eng Corporate Finance Pte. Ltd.Placement Agent

Mainboard : The Mainboard of the SGX-ST

Oriental Eagle : Oriental Eagle Holdings Limited

Reporting Accountants and : Ernst & Young LLPAuditors

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SGX-ST : Singapore Exchange Securities Trading Limited

Sinostate Management : Sinostate Management Limited

SkyVen : Skyven Growth Opportunities Fund Pte. Ltd.

Solicitors : Shook Lin & Bok LLP, Wee Woon Hong & Associates LLC, Haihua

Yongtai Law Firm and Jingtian & Gongcheng Attorneys at Law

State Council : The State Council of the PRC

Vision Top : Vision Top Holdings Limited

General

1H : Financial period between 1 January and 30 June

2H : Financial period between 1 July and 31 December

1Q : Financial period between 1 January and 31 March

2Q : Financial period between 1 April and 30 June

Accountants Reports : Reports from the Reporting Accountants and Auditors entitledAudited Combined Financial Statements of Anchun InternationalHoldings Ltd. and its Subsidiaries for the Financial Years ended 31December 2007, 2008 and 2009 and Unaudited CombinedFinancial Statements of Anchun International Holdings Ltd. and itsSubsidiary for the Financial Period from 1 January 2010 to 31March 2010 as set out in Appendix A and Appendix B of thisProspectus

Act or Companies Act : The Companies Act (Chapter 50) of Singapore, as amended,supplemented or modified from time to time

Adjusted NAV : NAV per Share as at 31 March 2010 and adjusted for theConversion

Application Forms : The printed application forms for the Invitation Shares which formpart of this Prospectus

Application List : The list of applications for the subscription and/or purchase of theInvitation Shares

Articles : The articles of association of our Company, as amended,supplemented or modified from time to time

ATM : Automated teller machine of a Participating Bank

ATM Application : An application for Offer Shares made through an ATM inaccordance with the terms and conditions of this Prospectus

Audited Combined Financial : The Audited Combined Financial Statements of AnchunStatements International Holdings Ltd. and its Subsidiaries for the Financial

Years ended 31 December 2007, 2008 and 2009 as set out inAppendix A of this Prospectus

Audit Committee : The audit committee of our Company as at the date of thisProspectus

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Board : Board of Directors of our Company as at the date of thisProspectus

BVI : British Virgin Islands

CAGR : Compound annual growth rate

CEO : Chief executive officer of our Company as at the date of thisProspectus

CFO : Chief financial officer of our Company as at the date of thisProspectus

COO : Chief operations officer of our Company as at the date of thisProspectus

Committee : Administrative Committee of Changsha National Hi-tech IndustrialDevelopment Zone

Conversion : The conversion of the RMB80.0 million convertible loan into anaggregate of 800 ordinary shares of our Company on 2 August2010 pursuant to the convertible loan agreement dated 22December 2009, supplemented by a deed of accession andratification dated 30 April 2010

CPF : Central Provident Fund

Director : A director of our Company as at the date of this Prospectus

Electronic Application : An ATM Application or IB Application

EPS : Earnings per Share

Executive Director : An executive Director of our Company as at the date of thisProspectus

Key Executives : Our key executives as at the date of this Prospectus whose namesare set out in the section entitled Key Executives of thisProspectus

FY or Financial Year : Financial year ended or, as the case may be, ending 31 December

IB : Internet banking

IB Application : An application for Offer Shares made through an IB website inaccordance with the terms and conditions of this Prospectus

Independent Director : An independent non-executive Director of our Company as at thedate of this Prospectus

Invitation : The invitation by our Company and the Vendors to the public tosubscribe for and/or purchase the Invitation Shares at the InvitationPrice, upon the terms and subject to the conditions set out in thisProspectus

Invitation Price : S$0.28 for each Invitation Share

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Invitation Shares : The 130,000,000 Shares which are the subject of this Invitation,comprising 105,000,000 New Shares and 25,000,000 VendorShares

IPO : Initial public offering

ISO9001 Quality System : The part of the ISO9000 series Quality System Model for quality

assurance in design/development, productions, installation andservicing which covers the following areas: quality managementsystem, management responsibility, resource management,product realisation, measurement, analysis and improvement

Lufeng Plant : Our factory plant located at No.65, Lufeng Road, ChangshaNational Hi-tech Industrial Development Zone

with a site area and gross production area ofapproximately 23,500 sqm and 7,000 sqm, respectively

Lusong Plant : Our factory plant located at No.539, Lusong Road, ChangshaNational Hi-tech Industrial Development Zone

with a site area and gross production area ofapproximately 57,051 sqm 15,000 sqm, respectively

Latest Practicable Date : 1 September 2010, being the Latest Practicable Date before thelodgement of this Prospectus with the Authority

Listing Manual : Listing manual of the SGX-ST, as amended, supplemented ormodified from time to time

Market Day : A day on which the SGX-ST is open for trading in securities

NAV : Net asset value

New Shares : The 105,000,000 new Shares for which our Company invitesapplications to subscribe for pursuant to the Invitation, upon theterms and subject to the conditions set out in this Prospectus

Nominating Committee : The nominating committee of our Company as at the date of thisProspectus

Non-Executive Director : A non-executive Director of our Company as at the date of thisProspectus

NTA : Net tangible assets

Offer : The offer by our Company and/or the Vendors of the Offer Shares

to the public in Singapore for subscription and/or purchase at theInvitation Price, upon the terms and subject to the conditions setout in this Prospectus

Offer Shares : The 2,000,000 Invitation Shares which are the subject of the Offer

Participating Banks : DBS Bank Ltd (including POSB) (DBS), Oversea-ChineseBanking Corporation Limited (OCBC) and United Overseas BankLimited and its subsidiary, Far Eastern Bank Limited (the UOBGroup)

Placement : The placement of the Placement Shares by the Placement Agent

on behalf of our Company and the Vendors for subscription and/orpurchase at the Invitation Price upon the terms and subject to theconditions set out in this Prospectus

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Placement Shares : 128,000,000 of the Invitation Shares which are the subject of thePlacement

PRC : Peoples Republic of China, but for the purposes of this Prospectusand for geographical reference only (unless otherwise indicated)excludes Macau, Hong Kong and Taiwan

Pre-IPO Investors : Sinostate Management, Able Gallery, Vision Top, China XLX, GoPower, SkyVen, Naresh Nanubhai Desai, Wong Chao Hsiung andQuek Yiang Hang

Prospectus : This prospectus dated 13 October 2010

R&D : Research and development

Remuneration Committee : The remuneration committee of our Company as at the date of thisProspectus

Restructuring Exercise : The restructuring exercise implemented in connection with the

Invitation, more fully described in the section entitled RestructuringExercise of this Prospectus

Securities Account : The securities account maintained by a Depositor with CDP butdoes not include a securities sub-account

Securities and Futures Act : The Securities and Futures Act (Chapter 289) of Singapore, asamended, supplemented or modified from time to time

Service Agreements : The service agreements entered into between our Company andour Executive Directors as described in the section entitledService Agreements of this Prospectus

Sub-division : The sub-division of every ordinary share into 8,000 ordinary sharesas described in the section entitled Share Capital of thisProspectus

Shares : Ordinary shares in the capital of our Company

Trust Agreements : The trust agreements dated 2 November 2009 pursuant to which LiChun Yang, Dai Feng Yu, Li Bin and Liang Gong Zeng wereappointed as the trustees for and on behalf of an aggregatenumber of 397 beneficiaries to hold the share interest in each ofOriental Eagle, Dawn Vitality, Inventive Result Enterprises andGiant Yield Global, and make general management decisions in

relation to the business operation of our Group for their benefit

Unaudited Combined Financial : The Unaudited Combined Financial Statements of AnchunStatements International Holdings Ltd. and its Subsidiary for the Financial

Period from 1 January 2010 to 31 March 2010 as set out inAppendix B of this Prospectus

United States or US : The United States of America

Vendors : Vision Top, Go Power, SkyVen, Naresh Nanubhai Desai, WongChao Hsiung and Quek Yiang Hang

Vendor Shares : The 25,000,000 issued and fully paid-up Shares owned by theVendors for which the Vendors invite applications to purchase onthe terms and subject to the conditions set out in this Prospectus

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WFOE : Wholly foreign owned entity

Currencies

S$ or $ and cents : Singapore dollars and cents, respectively

RMB and RMB fen : PRC Renminbi and Renminbi fen, respectively

US$ : United States dollars

Units and Others

% or per cent. : Percentage or per centum

kt/yr : 1,000 tonnes per year

MPa : Megapascal

mu : Equivalent to approximately 66.7 sqm per mu

n.a. : Not applicable

n.m. : Not meaningful

sqm : Square metres

: The diameter of the ammonia/methanol synthesis reactor inmillimetre

The expressions Associate, Associated Company, Associated Entity, Controlling Interest-Holder,Related Corporation, Related Entity, Entity At Risk, Interested Person, Interest Person Transaction,Subsidiary Entity, Substantial Shareholder and Substantial Interest Holder shall have the meanings

ascribed to them respectively in the Fourth Schedule of the Securities And Futures (Offers OfInvestments) (Shares And Debentures) Regulations 2005.

The expression Business Trust has the same meaning as in section 2 of the Business Trusts Act(Chapter 31A of Singapore).

The expression Controlling Shareholder has the meaning ascribed to it in the Listing Manual.

The expression Entity includes a corporation, an unincorporated association, a partnership and thegovernment of any state, but does not include a trust.

The expressions Depositor, Depository Agent and Depository Register shall have the meaningsascribed to them respectively in Section 130A of the Companies Act.

References in this Prospectus to Appendix or Appendices are references to an appendix or appendicesrespectively to this Prospectus.

Any discrepancies in tables included herein between the total sum of amounts listed and the totals shownare due to rounding. Accordingly, figures shown as totals in certain tables may not be an arithmeticaggregation of the figures which precede them.

Words importing the singular shall, where applicable, include the plural and vice versaand wordsimporting the masculine gender shall, where applicable, include the feminine and neuter genders andvice versa. References to persons shall include corporations.

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Any reference in this Prospectus, the Application Forms and Electronic Applications to any enactment is areference to that enactment as for the time being amended or re-enacted.

Any word defined under the Companies Act, the Securities and Futures Act or any statutory modificationthereof and used in this Prospectus, the Application Forms and Electronic Applications shall, whereapplicable, have the meaning ascribed to it under the Companies Act, the Securities and Futures Act orany statutory modification thereto, as the case may be.

Any reference in this Prospectus, the Application Forms and Electronic Applications to Shares beingallotted and/or allocated to you includes allotment and/or allocation to CDP for your account.

Any reference to a time of day in this Prospectus, the Application Forms or the Electronic Applications isa reference to Singapore time unless otherwise stated.

Any reference to we, us and our in this Prospectus is a reference to our Company, our Group or anymember of our Group as the context requires.

Certain names with Chinese characters have been translated into English. Such translations are providedsolely for the convenience of Singapore-based investors. The English names may not have been

registered with the relevant PRC authorities and should not be construed as representations that theEnglish names actually represent the Chinese characters.

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GLOSSARY OF TECHNICAL TERMS

To facilitate a better understanding of our business, the following glossary provides a description of someof the technical terms and abbreviations commonly found in our industry. The terms and their assignedmeanings may not correspond to standard industry or common meanings, as the case may be, or usageof these terms:-

alcohol-hydrocarbon reactors : The alcohol-hydrocarbon reactors are chemical systemcomponents in which the raw gas is purified by removing the COand CO2 so that the reaction gas compositions will be incompliance with industrial standards required for ammonia ormethanol synthesis, and useful gases are separated prior toentering the ammonia or methanol synthesis reactors

alcohol-hydrocarbonylation : A raw gas refining process which refines the raw gas throughrefining process chemical reaction instead of physical reaction to convert the gas

impurities, such as CO and CO2, into other chemicals (such asmethanol and dimethyl ether), which can be separated from the

useful gases easily

ammonia synthesis reactor : The ammonia synthesis reactor is a chemical system component inwhich hydrogen and nitrogen is synthesised into ammonia underthe required pressure, temperature and other conditions with theaid of a catalyst

catalyst : A chemical substance which is used to either increaseor decrease the rate of a chemical reaction. Unlike other reagentsthat participate in a chemical reaction, a catalyst is not consumedby the reaction itself

chemical system component : The chemical system components include the chemical synthesisreactors, pressure vessels, heat exchanger and separationequipment manufactured by Hunan Anchun which are used by ourcustomers in their production of ammonia and methanol

chemical synthesis reactors : Means the alcohol-hydrocarbon reactors, ammonia synthesisreactor and methanol synthesis reactor

CO : Carbon monoxide

CO2 : Carbon dioxide

cover head : A machinery part used to seal the two ends of the shell body of achemical system component

forged part : A forged part is metal which is shaped by using compressiveforces. Forged parts usually require further processing to achieve afinished machinery part

heat exchanger : The heat exchanger is a chemical system component used forefficient heat transfer from one medium to another, causing thereacting substances to be heated or cooled during the chemicalreactions in the ammonia or methanol manufacturing processes

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H2 : Hydrogen

methanol synthesis reactor : The methanol synthesis reactor is a chemical system component inwhich carbon monoxide, carbon dioxide and hydrogen aresynthesised into methanol under the required pressure,temperature and other conditions with the aid of a catalyst

methanol : A liquid with chemical formula CH3OH. It is the simplest form ofalcohol, and is a light, volatile, colourless, flammable, poisonousliquid with a distinctive odour

N2 : Nitrogen

raw gas : Raw gas for ammonia/methanol synthesis comprises N2, H2,methane, and some gaseous impurities such as oxides of sulphur(i.e. SO2) and oxides of carbon (i.e. CO, CO2)

separation equipment : The separation equipment is a chemical system component usedfor separation of substances, such as ammonia, methanol and oil,from a chemical mixture

SO2 : Sulphur dioxide

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INDUSTRY AND MARKET DATA

This document includes references to market share, market position and industry data and forecasts aswell as other macroeconomic information that we obtained from the report dated 13 September 2010prepared by China National Chemical Information Centre (CNCIC) and other sources of publiclyavailable information such as the National Bureau of Statistics of China. In particular, market and industrydata contained in the sections entitled Industry Overview, Managements Discussion and Analysis ofResults of Operations and Financial Position and Prospects, Business Strategies and Future Plans ofthis Prospectus have been obtained from the abovementioned sections prepared by CNCIC (which alsoreferences certain other third party sources) and the National Bureau of Statistics of China. Industrypublications, surveys and forecasts generally state that the information contained therein has beenobtained from sources believed to be reliable, but there can be no assurance as to the accuracy orcompleteness of such included information. While we have taken reasonable actions to ensure that theinformation is extracted accurately and in its proper context, we have not independently verified any of thedata from third party sources or ascertained the underlying economic assumptions relied upon therein,and none of us, the Vendors, or the Manager, the Underwriter and Placement Agent make anyrepresentation as to the accuracy or completeness of that information.

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SELLING RESTRICTIONS

This Prospectus does not constitute an offer, solicitation or invitation to subscribe for and/or purchase ourShares in any jurisdiction in which such offer, solicitation or invitation is unlawful or is not authorised or toany person to whom it is unlawful to make such offer, solicitation or invitation. No action has been or willbe taken under the requirements of the legislation or regulations of, or of the legal or regulatoryauthorities of, any jurisdiction, except for the filing and/or registration of this Prospectus in Singapore inorder to permit a public offering of our Shares and the public distribution of this Prospectus in Singapore.The distribution of this Prospectus and the offering of our Shares in certain jurisdictions may be restrictedby the relevant laws in such jurisdictions. Persons who may come into possession of this Prospectus arerequired by our Company, the Vendors, the Manager, the Underwriter and Placement Agent to informthemselves about, and to observe and comply with, any such restrictions at their own expense andwithout liability to us.

Persons to whom a copy of this Prospectus has been issued shall not circulate to any other person,reproduce or otherwise distribute this Prospectus or any information herein for any purpose whatsoevernor permit or cause the same to occur.

Hong Kong

The contents of this Prospectus have not been reviewed by any regulatory authority in Hong Kong. Youare advised to exercise caution in relation to the offer. If you are in any doubt about any of the contents ofthis document, you should obtain independent legal advice. Please note that (i) Shares may not beoffered or sold in Hong Kong by means of this Prospectus or any other document other than toprofessional investors within the meaning of Part I of Schedule 1 to the Securities and Futures Ordinanceof Hong Kong (Cap. 571) and any rules made thereunder (professional investors), or in othercircumstances which do not result in the document being a prospectus as defined in the CompaniesOrdinance of Hong Kong (Cap. 32) or which do not constitute an offer or invitation to the public for thepurposes of the Companies Ordinance, and (ii) no person may issue or have in its possession for thepurposes of issue, whether in Hong Kong or elsewhere, this Prospectus or any other advertisement,invitation or document relating to the Shares which is directed at, or the contents of which are likely to be

accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws ofHong Kong) other than with respect to Shares which are or are intended to be disposed of only topersons outside Hong Kong or only to professional investors.

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DETAILS OF THE INVITATION

LISTING ON THE SGX-ST

An application has been made to the SGX-ST for permission to deal in and for quotation of all our Sharesalready issued (including the Vendor Shares) and the New Shares on the Official List of the SGX-ST.

Such permission will be granted when we have been admitted to the Official List of the SGX-ST.

Acceptance of applications of the Invitation Shares (as defined herein) will be conditional upon thecompletion of the Invitation, which is subject to certain conditions, including the SGX-ST grantingpermission to deal in and for quotation of all our existing issued Shares (including the Vendor Shares)and the New Shares. In the event that completion of the Invitation does not occur or such permissionfrom the SGX-ST is not granted or for any other reason, monies paid in respect of any applicationaccepted will be returned to you at your own risk, without interest or any share of revenue or other benefitarising therefrom and you will not have any claim against our Company, the Vendors, our Directors, theManager or the Underwriter and Placement Agent.

Under the Securities and Futures Act, the Authority may, in certain circumstances issue a stop order (theStop Order) to our Company, directing that no Invitation Share or no further share to which thisProspectus relates, be allotted and/or allocated or issued and/or sold. Such circumstances will include asituation where this Prospectus (i) contains a statement or matter, which in the opinion of the Authority isfalse or misleading; or (ii) omits any information that should be included in accordance with the Securitiesand Futures Act; or (iii) does not, in the opinion of the Authority, comply with the requirements of theSecurities and Futures Act; or (iv) where the Authority is of the opinion that it is in the public interest toissue a Stop Order.

In the event that the Authority issues a Stop Order and where applications to subscribe for and/orpurchase the Invitation Shares to which this Prospectus relates have been made prior to the Stop Order,and:

(a) where the Invitation Shares have not been issued and/or sold to you, your application shall be

deemed to have been withdrawn and cancelled and our Company (on behalf of itself and theVendors) shall, within fourteen (14) days from the date of the Stop Order, return to you at your ownrisk all monies you have paid on account of your application for the Invitation Shares, withoutinterest or any share of revenue or other benefit arising therefrom; or

(b) where the Invitation Shares have been issued and/or sold to you, the issue and/or sale of theInvitation Shares shall be deemed to be void and our Company shall (on behalf of itself and theVendors), within fourteen (14) days from the date of the Stop Order, return to you at your own riskall monies you have paid on account of your applications for the Invitation Shares, without interestor any share of revenue or other benefit arising therefrom; or

(c) where the Invitation Shares have been transferred to you, the sale of the Invitation Shares shall be

deemed to be void and our Company (on behalf of itself and the Vendors) shall (i) if no documentspurporting to evidence title to those Invitation Shares have been issued to you, within seven (7)days from the date of the Stop Order, pay to you at your own risk all monies paid by you for thoseInvitation Shares, or (ii) if documents purporting to evidence title to those Invitation Shares havebeen issued to you, within seven (7) days from the date of the Stop Order, inform you to returnsuch documents to our Company within fourteen (14) days from that date and within seven (7)days from the date of receipt of such documents or the date of the Stop Order, whichever is earlier,pay to you at your own risk all monies paid by you for those Invitation Shares.

In each of the above instances where monies are refunded to you pursuant to a Stop Order, you will nothave any claim against our Company, the Vendors, our Directors, the Manager, or the Underwriter andPlacement Agent.

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The SGX-ST assumes no responsibility for the correctness of any of the statements made, reportscontained or opinions expressed in this Prospectus. Admission to the Official List of the SGX-ST is not tobe taken as an indication of the merits of the Invitation, our Company, our Subsidiary, our existing issuedShares (including the Vendor Shares) and the New Shares.

A copy of this Prospectus together with copies of the Application Forms have been lodged with andregistered by the Authority. The Authority assumes no responsibility for the contents of this Prospectus.

Registration of this Prospectus by the Authority does not imply that the Securities and Futures Act, or anyother legal or regulatory requirements, have been complied with. The Authority has not, in any way,considered the merits of our existing issued Shares (including the Vendor Shares) or the New Shares, asthe case may be, being offered or in respect of which the Invitation is made, for investment. We have notlodged or registered this Prospectus in any other jurisdiction.

Neither our Company, the Vendors, our Directors, the Manager, the Underwriter and Placement Agent,nor any other parties involved in the Invitation is making any representation to any person regarding thelegality of an investment in our Shares by such person under any investment or other laws or regulations.No information in this Prospectus should be considered as being business, legal or tax advice. You shouldconsult your own professional or other advisers for business, legal or tax advice regarding an investmentin our Shares. No person has been or is authorised to give any information or to make any representation

not contained in this Prospectus in connection with the Invitation and, if given or made, such informationor representation must not be relied upon as having been authorised by our Company, the Vendors, ourDirectors, the Manager, or the Underwriter and Placement Agent. Neither the delivery of this Prospectusand the Application Forms nor any documents relating to the Invitation shall, under any circumstances,constitute a continuing representation or create any suggestion or implication that there has been nochange in our affairs or in the statements of fact or information contained in this Prospectus since thedate of this Prospectus. Where such changes occur, we will promptly make an announcement of thesame to the SGX-ST and to the public and, if required, lodge a supplementary or replacement prospectuswith the Authority and make an announcement of the same to the SGX-ST and to the public and willcomply with the requirements of the Securities and Futures Act. You should take note of any suchannouncement and, upon release of such an announcement, shall be deemed to be given notice of suchchanges. Save as expressly stated in this Prospectus, nothing herein is, or may be relied upon as, apromise or representation as to the future performance or policies of our Company or our Subsidiary.

In the event that a supplementary or replacement prospectus is lodged with the Authority, the Invitationshall be kept open for at least fourteen (14) days after the lodgement of such supplementary orreplacement prospectus.

We are subject to the provisions of the Securities and Futures Act and the Listing Manual regardingcorporate disclosure. In particular, if after this Prospectus is registered but before the close of theInvitation, we become aware of:-

(a) a false or misleading statement in this Prospectus;

(b) an omission from this Prospectus of any information that should have been included in it under

Section 243 of the Securities and Futures Act; or

(c) a new circumstance that has arisen since the Prospectus was lodged with the Authority whichwould have been required by Section 243 of the Securities and Futures Act to be included in thisProspectus if it had arisen before this Prospectus was lodged,

that is materially adverse from the point of view of an investor, we may lodge a supplementary orreplacement prospectus with the Authority pursuant to Section 241 of the Securities and Futures Act.

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Where prior to the lodgement of the supplementary or replacement prospectus, applications have beenmade under this Prospectus to subscribe for and/or purchase our Invitation Shares and:

(a) where the Invitation Shares have not been issued and/or sold to you, our Company (on behalf ofitself and the Vendors) shall either:

(i) within two (2) days (excluding any Saturday, Sunday or public holiday) from the date of

lodgement of the supplementary prospectus or replacement prospectus, give you notice inwriting of how to obtain, or arrange to receive, a copy of the same and provide your with anoption to withdraw your applications and take all reasonable steps to make available within areasonable period the supplementary or replacement prospectus to you who have indicatedyou wish to obtain, or who have arranged to receive, a copy of the supplementary orreplacement prospectus; or

(ii) within seven (7) days from the date of lodgement of the supplementary or replacementprospectus, give you the supplementary or replacement prospectus, as the case may be,and provide you with an option to withdraw your applications; or

(iii) treat the applications as withdrawn and cancelled, in which case your applications shall be

deemed to have been withdrawn and cancelled, and our Company shall (on behalf of itselfand the Vendors), within seven (7) days from the date of lodgement of the supplementary orreplacement prospectus, return all monies paid in respect of any application to you at yourown risk, without interest or any share of revenue or other benefit arising therefrom; or

(b) where the Invitation Shares have been issued and/or sold to you, our Company shall (on behalf ofitself and the Vendors) either:

(i) within two (2) days (excluding any Saturday, Sunday or public holiday) from the date oflodgement of the supplementary prospectus or replacement prospectus, give you notice inwriting of how to obtain, or arrange to receive, a copy of the same and provide you with anoption to return to our Company the Invitation Shares, which you do not wish to retain title in,and take all reasonable steps to make available within a reasonable period thesupplementary or replacement prospectus to you who have indicated you wish to obtain, orwho have arranged to receive, a copy of the supplementary or replacement prospectus; or

(ii) within seven (7) days from the date of lodgement of the supplementary or replacementprospectus, give you the supplementary or replacement prospectus, as the case may be,and provide you with an option to return to our Company the Invitation Shares, which you donot wish to retain title in; or

(iii) (A) in the case of the New Shares, deem the issue as void and refund your payments for theNew Shares (without interest or any share of revenue or other benefits arising therefrom andat your own risk) within seven (7) days from the date of lodgement of the supplementary orreplacement prospectus; and (B) in the case of the Vendor Shares, deem the sale of the

Vendor Shares as void, and in the case where documents to evidence title to the VendorShares (title documents) have been issued to you, within seven (7) days from the date oflodgement of the supplementary or replacement prospectus, inform you to return the titledocuments within fourteen (14) Market Days from the date of lodgement of thesupplementary or replacement prospectus, and within seven (7) days from receipt of the titledocuments or the date of lodgement of the supplementary or replacement prospectus,whichever is the later, refund your payments for the Vendor Shares (without interest or anyshare of revenue or other benefits arising therefrom and at your own risk) within seven (7)Market Days from the date of lodgement of the supplementary or replacement prospectus,and you will not have any claim against our Company, the Vendors, the Manager, theUnderwriter and Placement Agent.

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If you wish to exercise your option under paragraph (a)(i) and (ii) above to withdraw yourapplication in respect of the Invitation Shares, you shall, within fourteen (14) days from the date oflodgement of the supplementary or replacement prospectus, notify our Company of this,whereupon our Company shall (on behalf of itself and the Vendors), within seven (7) days from thereceipt of such notification, return to you all monies you have paid on account of your applicationfor and/or purchase of such Invitation Shares, without interest or any share of revenue or otherbenefit arising therefrom, at your own risk.

If you wish to exercise your option under paragraph (b)(i) and (ii) above to return the InvitationShares issued and/or sold to you, you shall, within fourteen (14) days from the date of lodgementof the supplementary or replacement prospectus, notify our Company of this and return alldocuments, if any, purporting to be evidence of title to those Shares, to our Company, whereuponour Company shall (on behalf of itself and the Vendors), within seven (7) days from the receipt ofsuch notification and documents, if any, return to you all monies you have paid for those Shareswithout interest or any share of revenue or other benefit arising therefrom and the issue and/orsale of those Shares shall be deemed to be void.

This Prospectus has been prepared solely for the purpose of the Invitation and may only be relied uponby you in connection with your application for and/or purchase of the Invitation Shares and may not be

relied upon by any other person or for any other purpose.

This Prospectus does not constitute an offer of, or invitation or solicitation to subscribe for and/orpurchase the Invitation Shares in any jurisdiction in which such offer or invitation or solicitation isunauthorised or unlawful nor does it constitute an offer or invitation or solicitation to any personto whom it is unlawful to make such offer or invitation or solicitation.

Copies of this Prospectus and the Application Forms and envelopes may be obtained on request, subjectto availability, from:-

Kim Eng Corporate Finance Pte. Ltd.9 Temasek Boulevard

#08-03 Suntec Tower TwoSingapore 038989

and from members of the Association of Banks in Singapore and members of the SGX-ST and merchantbanks in Singapore.

A copy of this Prospectus is also available on:

(a) the SGX-ST website at http://www.sgx.com; and

(b) the Authoritys website at http://masnet.mas.gov.sg/opera/sdrprosp.nsf.

The Application List will open immediately upon the registration of the Prospectus with the

Authority and will remain open until 12.00 noon on 21 October 2010 or for such further period or periodsas our Directors may, in consultation with the Manager decide, subject to any limitations under allapplicable laws, PROVIDED ALWAYS THAT where a supplementary prospectus or replacementprospectus has been lodged with the Authority pursuant to Section 241 of the Securities andFutures Act, the Application List shall be kept open for at least fourteen (14) days after thelodgement of the supplementary prospectus or replacement prospectus.

Details of the procedures for application for the Invitation Shares are set out in Appendix C entitledTerms, Conditions and Procedures for Application and Acceptance of this Prospectus.

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INDICATIVE TIMETABLE FOR LISTING

The indicative timetable is set out below for the reference of applicants:-

Indicative date/time Event

21 October 2010, 12.00 noon Close of Application List and closing date and time for the Invitation

22 October 2010 Balloting of applications, or otherwise as may be approved by theSGX-ST (in the event of an over-subscription for the Offer Shares)

25 October 2010, 9.00 a.m. Commence trading on a ready basis

28 October 2010 Settlement date for all trades done on a ready basis

The above timetable is only indicative as it assumes that the date of closing of the Application List will beon 21 October 2010, the date of admission of our Shares to the Official List of the SGX-ST will be25 October 2010, the SGX-STs shareholding spread requirement will be complied with and the NewShares will be issued and fully paid-up prior to 25 October 2010.

The above timetable and procedure may be subject to such modification as the SGX-ST may, in itsabsolute discretion, decide, including the decision to permit commencement of trading on a ready basisand the commencement of such trading.

In the event of any changes in the closure of the Application List or the time period during which theInvitation is open, we will publicly announce the same:

(i) through a SGXNET announcement to be posted on the Internet at the SGX-ST websitehttp://www.sgx.com; and

(ii) in a local English newspaper.

Results of the Invitation including the allotment and/or allocation of the Invitation Shares and balloting (inthe event of an over-subscription for the Offer Shares) will be provided through the channels in (i) and (ii)above.

You should consult the SGX-ST announcement of the ready trading date on the Internet (at the SGX-STwebsite http://www.sgx.com) or the newspapers, or check with your brokers on the date on which tradingon a ready basis will commence.

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THE INVITATION

Invitation Size : 130,000,000 Invitation Shares comprising 105,000,000 New Shares and25,000,000 Vendor Shares. The New Shares, which form part of theInvitation, will, upon issue and allotment, rank pari passuin all respects withour existing issued Shares.

Invitation Price : S$0.28 for each Invitation Share.

Purpose of Invitation : Our Directors consider that the listing and quotation of our Shares on theOfficial List of the SGX-ST will enhance our public image and enable us totap the capital markets for the expansion of our business operations.

The Offer : The Offer comprises an invitation by our Company and the Vendors to thepublic in Singapore to subscribe for and/or purchase of the 2,000,000 OfferShares at the Invitation Price, subject to and on the terms and conditions ofthis Prospectus.

The Placement : The Placement comprises an offering by the Placement Agent on behalf ofour Company and the Vendors of 128,000,000 Placement Shares at theInvitation Price by way of placement, subject to and on the terms of thisProspectus.

Listing Status : Prior to the Invitation, there has been no public market for our Shares. OurShares will be quoted on the SGX-ST, subject to our admission to theOfficial List of the SGX-ST and permission for dealing in and for quotation ofour Shares being granted by the SGX-ST and that no Stop Order is issuedby the Authority.

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PLAN OF DISTRIBUTION

Prior to the Invitation, there has been no public market for the Invitation Shares. The Invitation Price wasdetermined by the Vendors and us in consultation with the Manager, the Underwriter and PlacementAgent based on market conditions and estimated market demand for our Shares determined through abook-building process. The Invitation Price is the same for all Invitation Shares and is payable in full onapplication.

The Invitation comprises the following:

(1) Offer Shares

The Offer Shares are made available to the members of the public in Singapore for subscriptionand/or purchase at the Invitation Price. Applications for the Offer Shares may be made by way ofOffer Shares Application Forms or by way of IB Application or ATM Application. The terms andconditions and procedures for application and acceptance are described in Appendix C entitledTerms, Conditions and Procedures for Application and Acceptance of this Prospectus. Pursuant tothe terms and conditions contained in the Management and Underwriting Agreement signedbetween our Company, the Vendors, the Manager and the Underwriter dated 13 October 2010, theUnderwriter has agreed to underwrite our Offer Shares. The Underwriter may, at its absolutediscretion, appoint one or more sub-underwriters.

In the event of an under-subscription for the Offer Shares as at the close of the Application List,that number of Offer Shares not subscribed for and/or purchased shall be made available to satisfyexcess applications for the Placement Shares to the extent there is an over-subscription for thePlacement Shares as at the close of the Application List.

In the event of an over-subscription for the Offer Shares as at the close of the Application Listand/or the Placement Shares are fully subscribed or over-subscribed as at the close of theApplication List, the successful applications for the Offer Shares will be determined by ballot orotherwise as determined by our Directors in consultation with the Manager, and approved by the

SGX-ST.

(2) Placement Shares

The Placement Shares are reserved for placement to members of the public in Singapore andinstitutional investors at the Invitation Price. Applications for the Placement Shares may only bemade by way of Application Forms. The terms, conditions and procedures for application andacceptance of the Placement Shares are set out in Appendix C entitled Terms, Conditions andProcedures for Application and Acceptance of this Prospectus.

Pursuant to the terms and conditions in the Placement Agreement signed between our Company,the Vendors and the Placement Agent dated 13 October 2010, the Placement Agent has agreed tosubscribe for and/or purchase and/or procure subscriptions and/or purchasers for the Placement

Shares at the Invitation Price. The Placement Agent may, at its absolute discretion, appoint one ormore sub-placement agents.

In the event of an under-subscription for the Placement Shares as at the close of the ApplicationList, that number of Placement Shares not subscribed for and/or purchased shall be madeavailable to satisfy excess applications for the Offer Shares to the extent that there is an over-subscription for the Offer Shares as at the close of the Application List.

Subscribers of Placement Shares may be required to pay brokerage (and if so required, suchbrokerage will be up to 1.0% of the Invitation Price), as well as stamp duties and other similarcharges.

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None of our Substantial Shareholders or Directors intends to subscribe for and/or purchase Sharesin the Invitation. None of the members of our Companys management or our employees intend tosubscribe for and/or purchase more than 5% each of the Invitation Shares in the Invitation. To thebest of our knowledge, we are unaware of any person who intends to subscribe for and/orpurchase more than 5% of the Invitation Shares.

Further, no Share shall be allotted or allocated on the basis of this Prospectus later than six

months after the date of registration of this Prospectus.

Please also refer to the section entitled Management, Underwriting and Placement Arrangementsof this Prospectus for further details.

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CLEARANCE AND SETTLEMENT

Upon listing and quotation on the SGX Mainboard, our Shares will be traded under the book-entrysettlement system of the CDP, and all dealings in and transactions of the Shares through SGX-ST will beeffected in accordance with the terms and conditions for the operation of securities accounts with theCDP, as amended from time to time.

Our Shares will be registered in the name of CDP or its nominee and held by CDP for and on behalf ofpersons who maintain, either directly or through Depository Agents, securities accounts with CDP.Persons named as direct securities account holders and Depository Agents in the Depository Registermaintained by the CDP, rather than CDP itself, will be treated, under our Articles and the Companies Act,as members of our Company in respect of the number of Shares credited to their respective securitiesaccounts.

Persons holding our Shares in securities accounts with CDP may withdraw the number of Shares theyown from the book-entry settlement system in the form of physical share certificates. Such sharecertificates will, however, not be valid for delivery pursuant to trades transacted on the SGX Mainboard,although they will be prima facie evidence of title and may be transferred in accordance with our Articles.

A fee of S$10.00 for each withdrawal of 1,000 Shares or less and a fee of S$25.00 for each withdrawal ofmore than 1,000 Shares is payable upon withdrawing the Shares from the book-entry settlement systemand obtaining physical share certificates. In addition, a fee of S$2.00 or such other amount as ourDirectors may decide, is payable to the share registrar for each share certificate issued and a stamp dutyof S$10.00 is also payable where our Shares are withdrawn in the name of the person withdrawing ourShares or S$0.20 per S$100.00 or part thereof of the last-transacted price where it is withdrawn in thename of a third party. Persons holding physical share certificates who wish to trade on the SGXMainboard must deposit with CDP their share certificates together with the duly executed and stampedinstruments of transfer in favour of CDP, and have their respective securities accounts credited with thenumber of Shares deposited before they can effect the desired trades. A fee of S$20.00 is payable uponthe deposit of each instrument of transfer with CDP.

Transactions in our Shares under the book-entry settlement system will be reflected by the sellerssecurities account being debited with the number of Shares sold and the buyers securities account beingcredited with the number of Shares acquired. No transfer of stamp duty is currently payable for theShares that are settled on a book-entry basis.

A Singapore clearing fee for trades in our Shares on the SGX Mainboard is payable at the rate of 0.04per cent of the transaction value subject to a maximum of S$600.00 per transaction. The clearing fee,instrument of transfer deposit fee and share withdrawal fee may be subject to Singapore Goods andServices Tax at the prevailing rate of 7.0%.

Dealings of our Shares will be carried out in Singapore dollars and will be effected for settlement on CDPon a scripless basis. Settlement of trades on a normal ready basis on the SGX Mainboard generallytakes place on the third Market Day following the transaction date, and payment for the securities is

generally settled on the following business day. CDP holds securities on behalf of investors in securitiesaccounts. An investor may open a direct account with CDP or a sub-account with a CDP DepositoryAgent. The CDP Depository Agent may be a member company of the SGX-ST, bank, merchant bank ortrust company.

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USE OF PROCEEDS AND LISTING EXPENSES

The total net proceeds from the Invitation (after deducting the estimated expenses in relation to theInvitation of approximately S$3.8 million) is estimated to amount to approximately S$32.6 million.

Listing expenses include professional fees, underwriting and placement commissions and brokerage fees,and miscellaneous expenses. The professional fees and miscellaneous expenses will be borne by ourCompany. The underwriting and placement commissions and brokerage fees will be borne by ourCompany and the Vendors in the proportion in which the Invitation Shares are offered by our Companyand each of the Vendors.

Net proceeds from the issue of the New Shares

The estimated net proceeds attributable to our Company from the issue of the New Shares (afterdeducting the estimated expenses to be borne by our Company in relation to the Invitation ofapproximately S$3.5 million) is approximately S$25.9 million. The allocation of the gross proceeds raisedfrom the New Shares for each principal intended use of proceeds and each principal item of expenses isset out below:

Amount allocated foreach dollar of the

proceeds raised fromthe Invitation (as a % of

Use of Proceeds S$000 the gross proceeds)

Expand our production facilities and capabilities (1) 21,500 73.1

Enhance our R&D capabilities and widen our range ofinnovative and cost-effective solutions 3,000 10.2

Working capital purposes 1,371 4.7

Sub-total 25,871 88.0

Listing Expenses borne by our Company

Professional fees 2,000 6.8

Underwriting and placement commissions and brokerage fees 1,029 3.5

Miscellaneous expenses (including listing fees) 500 1.7

Sub-total 3,529 12.0

Total 29,400 100.0

Note:-

(1) We expect these expansion plans to be completed within one and a half years from the date of our Companys admission tothe SGX-ST. In the event of any material delay in the completion of such expansion plans, we will publicly announce thereasons for such delay and expected completion timing on the SGXNET.

Please refer to the section entitled Prospects, Business Strategies and Future Plans of this Prospectusfor more details on our future plans and use of proceeds.

In the event that the amount set aside to meet our Companys portion of the estimated expenses listedabove is in excess of the actual expenses incurred in the connection with the Invitation, such excessamount will be applied towards our working capital purposes.

Pending the deployment of the net proceeds as aforesaid, the net proceeds may be added to our Groupsworking capital, placed as deposits with banks or financial institutions, or used for investments in short-

term deposits, money market or debt instruments, as our Directors may deem appropriate in theirabsolute discretion.

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The foregoing represents our best estimate of our allocation of our net proceeds from the Invitation basedon our current plans and estimates regarding our anticipated expenditures. Actual expenditures may varyor deviate from these estimates, and we may find it necessary or advisable to re-allocate our netproceeds within the categories described above.

In the event that there is any material deviation from the stated use of net proceeds from the Invitation,we will publicly announce the reasons for such deviations on the SGXNET, and seek approval from our

Shareholders.

We shall announce on the SGXNET as and when the proceeds of the Invitation have been materiallydisbursed, and provide a status report on the use of proceeds of the Invitation in the annual report(s) ofour Company.

In the opinion of our Directors, no minimum amount must be raised from the Invitation.

None of the proceeds of the Invitation will be used to discharge, reduce or retire any indebtedness of ourGroup.

In accordance with applicable accounting standards, the underwriting and placement commissions and

brokerage fees to be borne by our Company, as well as the professional fees and miscellaneousexpenses to be borne by the Company, will be offset against the gross proceeds raised from the NewShares in our share capital account. The remaining professional fees and miscellaneous expenses will betreated as expenses in our financial statements, which is expected to amount to approximately S$2.0million in FY2010.

Net proceeds from the sale of the Vendor Shares

The net proceeds attributable to the Vendors from the sale of the Vendor Shares (after deducting theVendors share of the estimated expenses in relation to the sale of the Vendor Shares of approximatelyS$0.3 million) will be approximately S$6.7 million.

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MANAGEMENT, UNDERWRITING AND PLACEMENT ARRANGEMENTS

Pursuant to the management and underwriting agreement dated 13 October 2010 (the Management andUnderwriting Agreement) entered into between our Company, the Vendors, the Manager and theUnderwriter, our Company and the Vendors have appointed the Manager to manage the Invitation.

The Manager will receive a management fee from our Company for its services rendered in connectionwith the Invitation.

Pursuant to the Management and Underwriting Agreement, the Underwriter agreed to underwrite theOffer Shares for a commission of 3.5% of the Invitation Price for each Offer Share, payable by ourCompany and each of the Vendors in the proportion in which the Offer Shares are offered by ourCompany and each of the Vendors. The Underwriter may, at its absolute discretion, appoint one or moresub-underwriters for the Offer Shares.

Pursuant to the placement agreement dated 13 October 2010 (the Placement Agreement) entered intobetween our Company, the Vendors and the Placement Agent, the Placement Agent agreed to subscribefor and/or purchase or procure subscriptions and/or purchasers for the Placement Shares for a placement

commission of 3.5% of the Invitation Price for each Placement Share, payable by our Company and eachof the Vendors in the proportion in which the Placement Shares are offered by our Company and each ofthe Vendors. The Placement Agent may, at its absolute discretion, appoint one or more sub-placementagents for the Placement Shares.

For the Offer Shares, the brokerage will be paid by our Company to members of the Association of Banksin Singapore, members of the SGX-ST and merchant banks in respect of successful applications madeon Application Forms bearing their respective stamps, or to the Participating Banks in respect ofsuccessful applications made through Electronic Applications at their respective ATMs at the rate of0.25% of the Invitation Price for each Offer Share, or in the case of DBS Bank, 0.50% of the InvitationPrice for each Offer Share. In addition, DBS levies a minimum brokerage fee of S$10,000 that will bepayable by our Company.

Subscribers of the Placement Shares may be required to pay brokerage of up to 1.0% of the InvitationPrice to the Placement Agent (or any sub-placement agent appointed by the Placement Agent), as wellas stamp duties and any other similar charges (subject to any GST, where applicable).

The Management and Underwriting Agreement may be terminated by the Manager on behalf of theUnderwriter at any time on or before the close of the Application List on the occurrence of certain eventsincluding, inter alia:-

(a) any change or any development involving a prospective change or any crisis in national, regional orinternational monetary, financial, political, industrial, legal, taxation, exchange controls or economicconditions (including but without limiting thereto, conditions in the stock market, in the foreignexchange market, inter-bank market and conditions with respect to interest rates, in Singapore and

overseas); or

(b) any change or introduction, or any prospective change or introduction of any legislation, regulation,policy, directive, order, guideline, notice, request or interpretation or application thereof, by anygovernment body in Singapore or elsewhere, the Securities Industry Council of Singapore, or theSGX-ST, the Authority or relevant authorities in the PRC or elsewhere; or

(c) the issue of a Stop Order by the Authority in accordance with Section 242 of the Securities andFutures Act; or

(d) foreign exchange controls in Singapore and overseas or any occurrence of a combination of anysuch changes or developments or crisis, or any deterioration of any such conditions; or

(e) any adverse change, or any development involving a prospective adverse change, in the condition(financial or otherwise) of the Company or of the Group as a whole,

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which event or events shall in the opinion of the Manager or the Underwriter (1) result or be likely toresult in a material adverse fluctuation or adverse conditions in the stock market in Singapore orelsewhere or (2) be likely to prejudice the success of the offer, subscription or sale of the InvitationShares (whether in the primary market or in respect of dealings in the secondary market) or (3) make itimpossible, impracticable or uncommercial to proceed with any of the transactions contemplated in theManagement and Underwriting Agreement or (4) be likely to have a material adverse effect on thebusiness, trading position, operations or prospects of the Company or of the Group as a whole or (5) be

such that no reasonable underwriter would have entered into the Management and UnderwritingAgreement or (6) result or be likely to result in the issue of a Stop Order by the Authority pursuant to theSecurities and Futures Act or (7) make it uncommercial or otherwise contrary to, or outside the usualcommercial practices of underwriting in Singapore for, the Underwriter to observe or perform or beobliged to observe or perform the terms of the Management and Underwriting Agreement.

In the event the Management and Underwriting Agreement is terminated, our Company reserves theright, at the absolute discretion of the Directors, to cancel the Invitation.

The Placement Agreement is conditional upon the Management and Underwriting Agreement not beingterminated or rescinded pursuant to the provisions of the Management and Underwriting Agreement.

Save as disclosed above, we do not have any material relationship with the Manager, Underwriter andPlacement Agent or any sub-placement agent in relation to the Invitation.

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PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and is subject to, the more detailed information andfinancial statements (including the notes thereto) appearing elsewhere in this Prospectus. You shouldcarefully consider all the information presented in this Prospectus, particularly the matters set out in thesection entitled Risk Factors of this Prospectus before making an investment decision.

OUR COMPANY

On 29 October 2009, our Company was incorporated in Singapore under the Singapore Companies Actas a private company limited by shares under the name of Anchun Holdings Pte. Ltd.. On 9 September2010, we changed our name from Anchun Holdings Pte. Ltd. to Anchun International Holdings Pte. Ltd.so as to align with our strategic direction of business development. On 14 September 2010, we wereconverted into a public limited company and changed our name to Anchun International Holdings Ltd..

Our Company registration number is 200920277C. Our registered office is located at 1 Robinson Road,#17-00 AIA Tower, Singapore 048542 whereas we carry out our principal business at No.539, LusongRoad, Changsha National Hi-tech Industrial Development Zone, Changsha City, Hunan Province, PRC

. Our telephone number is (86)-731- 8514 8687and our facsimile number is (86)-731- 8514 8687.

OUR BUSINESS

We are a leading integrated chemical systems engineering and technology solutions provider to the PRCpetrochemical and chemical industries, in particular, manufacturers of ammonia and methanol basedproducts. Since our inception, we have established a track record of operational excellence, technologicalbreakthroughs and national awards for our achievements. In addition, we have obtained severalenterprise awards and accolades, including 2009 Forbes China Up & Comers award by Forbes Chinamagazine (ranked 98th enterprise across all industries nationwide for enterprise growth potential) and2005 China Petrochemical and Chemical Industries Outstanding Private Enterprise

by China Petroleum and Chemical Industries Association.

A detailed discussion of our business and the services we provide is set out in the section entitledHistory and Business of this Prospectus.

OUR COMPETITIVE STRENGTHS

Our Directors believe that our competitive strengths are as follows:-

Leading and established management team

Integrated business model anchored on strong R&D capabilities and registered patents for our keytechnologies

Established track record of operational excellence, technological breakthroughs and nationalawards

Widely-recognised as a leading enterprise and brand name in the PRC chemical systemsengineering and technology solutions industry

Extensive and notable customer network across the PRC

High barriers to entry to our industry

A detailed discussion of our competitive strengths is set out in the section entitled Competitive Strengthsof this Prospectus.

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OUR FINANCIAL PERFORMANCE

Our financial performance for the periods under review is summarized below:-

Audited Unaudited

RMB000 FY2007 FY2008 FY2009 1Q2009 1Q2010

Revenue 114,780 121,009 294,841 104,445 67,295

Gross profit 52,531 56,591 118,802 40,410 40,746

Profit before tax 27,859 25,637 88,303 34,904 29,166

Profit net of tax attributable toShareholders 22,718 21,304 75,161 29,656 25,063

Please refer to the section entitled Managements Discussion and Analysis of Results of Operations andFinancial Position of this Prospectus and the Accountants Reports for further details.

OUR BUSINESS STRATEGIES AND FUTURE PLANS

Leveraging on our brand name and position as a leading integrated chemical systems engineering andtechnology solutions provider to the PRC petrochemical and chemical industries, in particular,manufacturers of ammonia and methanol based products, we intend to adopt the following strategies todrive our future growth and increase our shareholder value:-

Expand our production facilities and capabilities

Enhance our R&D capabilities and widen our range of innovative and cost-effective solutions

Expand our sales and marketing capabilities and initiatives

Explore opportunities in strategic investments or alliances and acquisitions

In view of our Groups future plans, our Directors consider that the listing of our Shares on the SGX-STwill provide our Group with a new channel to gain access to the capital markets, promote our corporateprofile and further enhance our Groups image, all of which are in the interests of our Groups futuregrowth and development.

A detailed discussion of our future plans is set out in the section entitled Prospects, Business Strategiesand Future Plans of this Prospectus.

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ISSUE STATISTICS

INVITATION PRICE

Adjusted NAV (as at end of 1Q2010) per Share

(a) before adjusting for the estimated net proceeds of the New Shares andbased on the pre-Invitation share capital of 400,000,000 Shares

(b) after adjusting for the estimated net proceeds of the New Shares and basedon the post-Invitation share capital of 505,000,000 Shares

Premium of Invitation Price per Share over the Adjusted NAV per Share:-

(a) before adjusting for the estimated net proceeds of the New Shares andbased on the pre-Invitation share capital of 400,000,000 Shares

(b) after adjusting for the estimated net proceeds of the New Shares and basedon the post-Invitation share capital of 505,000,000 Shares

EARNINGS

Historical net EPS of our Group for FY2009 based on the pre-Invitation sharecapital of 400,000,000 Shares

Historical net EPS of our Group for FY2009 had the Service Agreements been inplace from the beginning of FY2009(2) and based on the pre-Invitation share capitalof 400,000,000 Shares

PRICE EARNINGS RATIO

Historical price earnings ratio based on the Invitation Price and the historical netEPS of our Group for FY2009

Historical price earnings ratio based on the Invitation Price and the historical netEPS of our Group for FY2009 had the Service Agreements been in place from thebeginning of FY2009(2)

NET OPERATING CASH FLOW (3)

Historical net operating cash flow per Share of our Group for FY2009 based on thepre-Invitation share capital of 400,000,000 Shares

Historical net operating cash flow per Share of our Group for FY2009 had theService Agreements been in place from the beginning of FY2009(2) and based onthe pre-Invitation share capital of 400,000,000 Shares

PRICE TO NET OPERATING CASH FLOW

Historical price to net operating cash flow ratio based on the Invitation Price and thehistorical net operating cash flow per Share for FY2009

Historical price to net operating cash flow ratio based on the Invitation Price and thehistorical net operating cash flow per Share for FY2009 had the ServiceAgreements been in place from the beginning of FY2009(2)

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28.0 cents(approximatelyRMB141.4 fen)(1)

RMB34.1 fen

RMB52.9 fen

314.3%

167.3%

RMB18.8 fen

RMB18.5 fen

7.5 times

7.7 times

RMB14.5 fen

RMB14.1 fen

9.8 times

10.0 times


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MARKET CAPITALISATION

Market capitalisation based on the Invitation Price and post-Invitation share capitalof 505,000,000 Shares

Notes:-

(1) Calculated based on the exchange rate of S$1.00 = RMB5.049 as at the Latest Practicable Date.

(2) Had the Service Agreements been in existence for FY2009, the aggregate remuneration (including contributions, bonus, andbenefits-in-kind) paid to the Executive Directors would have been approximately RMB2.3 million (approximately S$0.5 million)instead of approximately RMB1.1 million (approximately S$0

Registration Prospectus (Clean)(131010)

Documents

Transcript of Registration Prospectus (Clean)(131010)