China Water: China's central government has finally announced its long-awaited Water Pollution Prevention Plan today, with the contents largely similar to what the street was expecting.
The plan set specific targets for the industry such as water standards for surface water/underground water, wastewater treatment coverage ratio requirements for different areas as well as detailed measures the government will take to achieve those targets.
Accordingly, China will ban water-polluting industrial plants e.g small paper mills and oil refineries, by the end of 2016.
Overall, Maybank-KE is upbeat on the anti-water pollution plan, as it is likely to trigger a new round of investments. Amid a still-fragmented market, the Chinese government’s unrelenting push for consolidation should also sustain the M&A wave and market sentiment.
The house is Overweight on the sector, with Buy calls on all three companies under coverage, namely SIIC Environment (TP $1.26), China Everbright Water (TP $1.17) and United Envirotech