China Environmental:Environmental expert presentation takeaway

类别:投资策略 机构:德意志银行 研究员:Thomas Zhu,Michael Tong 日期:2018-01-18

We invited Mr. Xue Tao, Executive Director of the E20 Environmental IndustryResearch Institute, to make a presentation at the dbAccess China conference. Wesummarize the key takeaways.

    Impact from recent regulations on PPP.

    Both MoF’s policy paper #92 and the new regulations on asset management willaffect PPP projects financing. However he believes that most projects affected willbe environment renovation projects, rather than projects with end-user payments(i.e. projects with significant operations revenue). Some environment renovationprojects “signed-up” (under the definition of MoF) may not be able to obtain bankloans – in the case of Sichuan for example, only 30% of the signed-up projectshave obtained bank loans. If the project cannot be executed, the project companywill be fined (though the amount is unlikely to be significant). It is required inMoF’s policy paper #92 that part of the payments for construction should be doneafter evaluating project performance, and therefore actual receivables collectioncould take longer than previously expected.

    PPP project database cleanup.

    The cleanup of PPP project database is likely to be completed in March 2018. Xueexpects most projects taken out of the database to be projects not yet signedup, and he expects strict scrutiny for future projects to be included. For someprovinces, budgets for projects in the database have got close to the 10% limitof their financial budget.

    Comparison of different environmental projects.

    Waste to Energy. WTE is still the most popular project type in environmentalamong the companies. With the development of waste sorting, there will bemore treatment projects specifically for particular types of waste (e.g. projectsspecifically for kitchen waste). China is likely to have sufficient WTE capacitiesafter three years while most new project awards by then will be projects relatedto sludge treatment and kitchen waste treatment.

    Environmental sanitation. This is the second most popular project type amongthe companies. Sanitation companies generally seek IRR of ~12%. Expenditureon sanitation by the government should increase one year after another on higherenvironmental standards. Most sanitation projects are paid by district level fiscal budgets rather than at city level. The price of long-term projects is based onnegotiation, which rises if the government's requirements go up.

    Air pollution treatment. Large-scale projects in desulfurization and denitrificationhave mostly been completed. Projects now are mainly small-scale projects indesulfurization and denitrification, as well as projects in VOC, which are normallyalso small-scale.

    Hazardous Waste Treatment. The valuation in HWT M&A projects is complicatedas projects vary from one to another, and thus the profitability of M&A project isdifficult to forecast.

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桃李面包 中性 -- 研报
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工商银行 持有 -- 研报
农业银行 持有 -- 研报
招商银行 持有 -- 研报
宁波银行 持有 -- 研报
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海天味业 持有 -- 研报
伊利股份 买入 -- 研报
中炬高新 买入 -- 研报

盈利预测

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桃李面包 0 0 研报
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伊利股份 0.95 1.08 研报
洽洽食品 0.86 0.82 研报
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恒顺醋业 0.29 0.14 研报
安琪酵母 1.13 1.08 研报
香飘飘 0 0 研报
绝味食品 0 0 研报
安井食品 0 0 研报

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贵州茅台 37 持有 买入
中信证券 34 持有 买入
三一重工 34 持有 买入
贵州茅台 28 买入 买入
隆基股份 27 买入 买入
华泰证券 27 持有 买入
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五粮液 26 持有 买入
中顺洁柔 26 持有 买入
通威股份 25 买入 持有
中国国旅 25 持有 买入
万科A 24 买入 中性
三一重工 23 持有 买入
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伊利股份 23 持有 买入
芒果超媒 23 买入 买入

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电子信息 419 73 226
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化工行业 278 52 96
电子器件 277 48 156
金融行业 276 23 134
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建筑建材 239 33 122
机械行业 209 42 91
酿酒行业 180 16 103
家电行业 180 14 111
房地产 179 22 117
酒店旅游 179 20 62
交通运输 162 22 75
食品行业 146 21 68
有色金属 141 33 56
商业百货 136 19 79