China Environment

China Environment (CEL): OCBC has an unrated report on the counter. The house note that CEL is a provider of industrial waste gas treatment solutions in China, which is likely to benefit from the Chinese government’s increased focus on cleaning up the environment in China. At the invitation of CEL, house visited their new facility in Bengbu, Anhui Province, China, which houses 12 production buildings. Also visited one of its customers – Shanghai-listed Nanjing Iron & Steel Co (NIS) – to have a look at four dust elimination machines currently deployed in one of its facilities. CEL has built up to 15 such machines for NIS since 2004; but understand that all these machines are due for upgrades to meet the increasingly higher discharge standards over the next few years. Currently, CEL has an order book of RMB241m as of Sep 2013, up from RMB66.8m as of end-Jun, which it expects to deliver over the next few months. Coupled with some RMB80m raised via a share placement recently, CEL adds that it has sufficient working capacity to take on bigger jobs.