Sanli Environmental Limited Announces Strategic Joint Venture for Major Water Infrastructure Project

Key Points from the Joint Venture Announcement

• Joint Venture Formation: Sanli Environmental Limited, through its wholly-owned subsidiary Sanli M&E Engineering Pte. Ltd. (“Sanli M&E”), has entered into a joint venture agreement with Shanghai Tunnel Engineering Co (Singapore) Pte Ltd (“STECS”). The joint venture is named “SANLI–STECS CNF3 JOINT VENTURE” and will operate as an unincorporated entity.
• Project Scope: The joint venture will act as a subcontractor for the development of Changi NEWater Factory 3 (CNF3), a significant project awarded by PUB, Singapore’s National Water Agency, to Sanli M&E.
• Equal Partnership: Both Sanli M&E and STECS will hold equal participating interests of 50% each in the joint venture, reflecting a balanced collaboration. No initial cash capital contribution is required by either party.
• Division of Responsibilities:
  • Sanli M&E: Will be responsible for mechanical, electrical, instrumentation, control and automation works, structural steelworks, and building management system construction.
  • STECS: Will handle civil, structural, architectural, structural steelworks, and external works, including building services but excluding the building management system.
• Governance Structure: A management committee comprising four members (two from each party) will oversee the joint venture. Sanli M&E, as the lead party, will appoint the chairman. Key decisions, such as performance of works, financial policy, and amendments to the agreement, require unanimous committee approval.
• About STECS: Established in 1996, STECS is a leading civil engineering firm in Singapore, specializing in rail transit and underground space construction, with extensive experience in large-scale infrastructure projects.
• Independence: STECS is not related to Sanli Environmental Limited or its substantial shareholders. None of the directors or substantial shareholders of Sanli have any direct or indirect interests in STECS.
• Financial Impact: The joint venture is not expected to have a material impact on the Group’s consolidated net tangible assets or earnings per share for the financial year ending 31 March 2026.
• Ongoing Disclosure: Sanli Environmental Limited will update shareholders on any material developments relating to the joint venture as they arise.

Implications for Shareholders and Potential Price Sensitivity

The formation of the joint venture for the Changi NEWater Factory 3 project is a significant development for Sanli Environmental Limited. Securing the contract for a major infrastructure project from PUB, Singapore’s National Water Agency, demonstrates the Group’s capabilities and market positioning. The collaboration with STECS, a prominent and experienced construction company, may further strengthen Sanli’s project execution capabilities and reputation in the water and environmental engineering sector.

While the immediate financial impact is stated to be non-material for the current financial year, the successful execution and future revenue streams from this large-scale project could enhance Sanli’s longer-term financial performance and strengthen its order book. This announcement could be viewed positively by investors as it highlights Sanli’s ability to secure and deliver complex projects in partnership with established industry players.

Shareholders should closely monitor subsequent updates from the company regarding project milestones, financial contributions, and other material developments, as these could influence future share price movements.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Investors are advised to perform their own due diligence and consult with financial advisors before making investment decisions. The information herein is based on the company’s public announcement and may be subject to future updates or changes.

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