Euro Tech Holdings Company Stock

Euro Tech Holdings Company Limited operates as a distributor of a range of advanced water treatment equipment, laboratory instruments, analyzers, test kits and related supplies and power generation equipment (including recorders and power quality analyzers).

The company acts as an exclusive or non-exclusive distributor for well-known manufacturers of such equipment, primarily to commercial customers and governmental agencies or instrumentalities in Hong Kong and mainland China, but also to commercial customers in certain other regions, such as Macau. The company distributes products primarily through Euro Tech (Far East) Limited (Far East), its wholly-owned subsidiary in Hong Kong.

The company’s main categories of products distributed by Far East include:

Laboratory instruments, analyzers and test kits are used to analyze the chemical content and ascertain the level of impurities or other contaminants in water. The company distributes analytical re-agents and chemicals to support testing systems of laboratory and portable instruments, process analyzers and portable test kits and assist in the analysis process. The company offers a wide variety of test kits to test water quality. These portable test kits are easy to use and pre-adapted for rugged field use. These test kits are used to monitor drinking water distribution systems.

Laboratory and portable instruments generally consist of analytical instruments, including but not limited to the following: spectrophotometers, colorimeters, turbidimeters, ion-selective electrodes, chemical oxygen demand apparati, digestion apparati, and precision re-agent dispensing devices, which are used to test and monitor impurities and contaminants in water systems.

The company also distributes continuous-reading process analyzers, process turbidimeters, pH controllers and analyzer accessories. These products are generally used to monitor and control drinking water quality to ensure that water treatment procedures comply with regulatory standards.

Pact-Yixing (Yixing Pact Environmental Technology Company Limited and Pact Asia Pacific Limited), in which Far East holds 58% equity interests, provides customers with solutions to engineering problems. Pact-Yixing conducts industrial water and waste-water treatment projects, mostly for large multinational manufacturing facilities located in the PRC that are run by companies based in the U.S.A., Europe, and Japan. Pact-Yixing also conducts process design projects for its clients. With respect to the process design projects, the procedures involving mechanical and electrical engineering are completed in-house and the procedures involving manufacturing are contracted to approved fabricators of components. Fabrication drawings are also done in-house for submittal to said fabricators under the supervision of Pact-Yixing’s quality control engineers. Pact-Yixing’s clients come from a varied spectrum of industries covering semiconductor, pharmaceutical, petrochemicals, auto and auto parts, steel, food and beverage and beauty products.

The water and waste-water treatment processes applied at Pact-Yixing cover chemical, physical, biological and membrane separation. With respect to the water treatment side of Pact-Yixing’s business, they design and build filtration equipment, ion-exchange softeners and demineralizers, reverse osmosis, electro-deionization, chemical treatment systems and package type mobile water treatment plants. As for waste-water treatment, Pact-Yixing design and build biological treatment systems, oil coalescers, dissolved air flotation, lamella clarifiers, chemical reactor tanks, ultrafiltration, microfiltration, dewatering systems, and package type mobile sewage treatment plants. Biological treatment plants cover both aerobic and anaerobic processes. State-of-the-art aerobic processes of SBR (sequential batch reactors) and MBR (membrane biological reactors) are technologies also covered by Pact-Yixing.

Revenues from the company’s trading activities have fallen-off as a substantial number of its suppliers have been selling their products into China directly and through other distributors. Many of these other distributors are local Chinese companies.

The company has been in a process of shifting its emphasis from the distribution of instruments and equipment to engineering and manufacturing activities.

Notably, Pact-Yixing manufactures its own self-developed ballast water treatment system (BWTS) for maritime industry, it includes shipowners, shipyard, and port harbors operators, etc.

In 2020, Pact-Yixing sold the first ballast water port solution system for commercial sale. This makes Pact-Yixing one of the first few companies that can complete ballast water port solution system in Asia. Pact-Yixing will continue to promote this technology, for commercial sale to companies located in countries participating the Belt and Road Initiative.

With this new development, the company plans to gradually transform itself from a company that is heavily reliant engineering and manufacturing, to a technology driven company. The company will continue to identify potential new markets for more business opportunities, given that its development of the ballast water port solution system can address the pain point in certain markets. The company will also continue to look for distributors and partners located in Asian countries to promote its ballast water treatment system products and EPC water treatment/equipment services.

Principal Markets: Mainland China and Hong Kong

The company’s operations are located almost entirely within, and revenues are almost entirely generated from mainland China and Hong Kong.

Growth Strategy

The company is focusing its trading activities in Hong Kong, Macau; and Guangdong, China.

In 2018, the company received a PRC government grant to fund the development of a prototype of ballast water port solution. In the year ended December 31, 2022 (Fiscal 2022), the company sold 27 sets of BWTS for ship vessels, with a majority of them exported to countries other than China.

The company is embarking on promotion activities for port solution systems in China and South East Asia to explore the growing demand. The company continues to promote its BWTS products that treated ballast water at rates of 200, 300, 500, 750, 1,200 and 1,250 cubic meters per hour and port solution system. The company obtained the utility model patents and is applying for the invention patents for this port solution system in China. In addition, the company continues to invest a portion of its resources to developing its BWTS for the global market, and, based upon Pact-Yixing’s competitive prices and the high quality of its services, feel positive about its ability to expand its worldwide customer base by working closely and actively with some international engineering companies. The company also plans to participate more overseas maritime /water tradeshows in 2023 to capture more potential sales distributors located overseas. In addition, the company intends to continue to assemble and/or manufacture additional products, and seeks opportunities with its suppliers to assemble their products.

Product Distribution and Other Services

Scientific Instruments

The company distributes analytical instruments, environmental quality monitoring instruments, sample pre-treatment equipment and general purpose laboratory instruments. Analytical instruments include, but are not limited to, chromatographs, mass spectrometers, flow injector analyzers, automated sample preparation workstations and atomic spectrometers. Environmental monitoring instruments include both air and water quality monitoring instruments. Air quality monitoring instruments are generally divided into those which monitor ambient (i.e., atmospheric) air, and those which monitor pollution sources. The revenue from sales of air quality monitoring instruments is nominal as the company has not been able to acquire a distributorship for air quality instruments from brand name manufactures that engage in direct customer sales or rely on their existing distributors. Sample pre-treatment equipment is used to clean-up the sample prior to chemical analysis for checking pesticides and drug residues in food. Additionally, the company offers general purpose laboratory instruments, including a variety of water quality monitoring and analysis equipment, such as continuous reading process analyzers, process turbidimeters, pH controllers, and test kits for monitoring chemical content in water (i.e., chlorine, fluorides, etc.).

Customers for the analytical instruments include government agencies, academic and research institutions, major laboratories, and beverage producers, including analytical system to the Hong Kong Government Laboratory for the analysis of persistent organic pollutants (POPs) and pesticides in the environment. Customers for water quality monitoring instruments also include government agencies.

Power Solutions and Process Automation Products

The company distributes general testing and measuring equipment, including multi-channel digital and analogue recorders, signal amplifiers and calibration equipment for energy conservation, renewable energy equipment, power quality analyzers, and continuous emissions monitoring systems to industries, including power plants, railway and aero-space industries, utilities, educational institutions, and telecommunications companies.

The company also provides process control systems specifically designed for the industrial needs of clients, including sensors, temperature gauges, pressure gauges, power and energy consumption meters, flow meters, valves, temperature and pressure transmitters and control devices, temperature and pressure calibrators, moisture, power, energy, and harmonic analyzers. Customers for the foregoing distributed products include government water supply agencies, water treatment facilities, power and electric companies, petrochemical plants, and instrument manufacturers.

In conjunction with the distribution of products, such as programmable logic controllers, telemetry units and supervisory control and data acquisition (SCADA) systems and software, the company also provides systems engineering to government agencies, waste-water treatment and power generation plants and beverage producers. Specific services provided include automated control system design, the operation and management of various waste-water, water and power generation projects. The company endeavors to introduce, develop, and promote new and advanced technologies, products, and appropriate technical developments from abroad. It has also been cooperating with established technology companies and engage in systems and special projects in Programmable Logic Control, Telemetry unit, SCADA systems, Human Machine Interface Software and Sequential Event Recording.

Technical Support

The company’s technical support staff provides customers with maintenance, installation assistance, and calibration services, and assists sales personnel in giving technical advice to and performing product demonstrations for customers.

Seasonality

The company’s business is affected by seasonality. Construction of its treatment systems is typically slower during winter seasons due to inclement weather and around Chinese holidays due to the closure of government agencies and other facilities.

Customers

During Fiscal 2022, the company distributed products to approximately 1,000 customers located in Hong Kong, mainland China and Macau, such as Hong Kong Water Supplies Department, Government Laboratory, Drainage Services Department, universities, and public utilities agencies.

Suppliers

The company distributes products manufactured by a substantial number of major American, European, and Japanese corporations, including Thermo Fisher Scientific Group, Stanford Research Systems, Inc., Hach Company, and Hioki E.E. Corp., as well as Peiport Scientific Aero Limited and Westermo Data Communications Pte Ltd., which are the company’s largest suppliers.

Sales and Marketing

The company distributes products through its principal office located in Hong Kong. The company’s main marketing channels are through the work of its marketing and sales force.

History

Euro Tech Holdings Company Limited was founded in 1971. The company was incorporated in the British Virgin Islands in 1996.