Tuesday, January 28, 2014

China Water and Environmental sector

China Water and Environmental sector: Stan Chart remains bullish on China’s water and environment sectors. Says its checks and discussions with Greenpeace and China Water Risk affirms its views that pollution and water shortage are real issues, and raises demand for quality turnkey providers. The house notes new growth opportunities in industrial parks (single-digit penetration) and rural China (1%) for non-SOEs with technological expertise, given the stricter environmental standards. Sound Global (967 HK) is Stan Chart’s new top pick for its meaningful exposure to industrial users and rural projects. Its BOT integration has been quicker than expected, providing a re-rating opportunity. The house also likes China Everbright International (257 HK) and Beijing Enterprises Water (371 HK). Meanwhile, the latest govt data suggests waste-to-energy (WTE) capacity has to grow 36% over 2013-15e to achieve 2015 targets, faster than the 28% in 2011-15e. The house believes CEI is exposed to several provinces where growth could accelerate, and New Environmental Energy (3989 HK) is well positioned to grow from a low base, with execution waiting to be proven. In Spore, the top actives that offer exposure to this sector and are enjoying positive momentum are Hankore, SIIC, Memstar, United Envirotech, China Environment.

No comments:

Post a Comment