2016 Annual Results Non-Deal Roadshow PresentationApril 2017
Strictly Private and Confidential
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Disclaimer
This presentation incorporates information contained in the annual results announcement (the “Results
Announcement”) for the year ended 31 December 2016 of CT Environmental Group (the “Company”). This
presentation should be read in conjunction with the Results Announcement and is qualified in its entirety
by the more detailed information and financial information contained in the Results Announcement.
Other than the information contained in the Results Announcement, you shall not reproduce or distribute
this presentation, in whole or in part, and you shall not disclose any of the contents of this presentation or
use any information herein for any purpose without the Company’s prior written consent. You hereby
agree to the foregoing by accepting delivery of this presentation.
The contents of this presentation have not been reviewed or approved by any regulatory authority in
Hong Kong or elsewhere. The contents of this presentation are not investment, legal or tax advice. You are
advised to exercise caution in perusing the contents of this presentation. If you are in any doubt about any
of the contents of this presentation, you should obtain independent professional advice.
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Contents
• Strategic Overview and 2016 FY Highlights
• 2016 FY Financial Overview
• 2017 Strategic Focus
• Appendix
Strategy Overview and
2016 FY Highlights
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Leading environmental protection solution provider
CT Environmental Group is at the heart of an environmental and
resource revolution
There are increasingly favourable government policies to facilitate
economic growth in a more environmentally-friendly way along with
enhanced regulation of the protection treatment service
We are well positioned to take advantage of the growing market
demand for high-quality integrated industrial waste management
solutions
5
Market Position & Strength Growth Strategy 2016 Progress
Early mover in the industrial wastewater
treatment segment with well-recognized
franchise and effective BOO model
Ongoing diversification of our customer
base
Strong R&D capability & significant
project development experience
Continue to broaden our expertise and
service offerings
Vertical expansion into sludge treatment
Sector & effective diversification into
hazardous waste treatment sector
Penetrate into new provinces
A leading player in industrial waste treatment area with strong entrepreneurship and project track record poised to capture growth in a juncture when China
advocates environmental consciousness
Establishment of greenfield projects in
Guangdong Longmen as an integrated
solid waste environmental protection
base
Significant progress on the first flagship
project in Guangxi market, an energy-
saving environmental protection
industrial park project
Successful integration of acquisitions
CTEG continues to deliver on long-term strategy
6
2016 FY performance highlights
CTEG delivered strong growth and further strengthened its core businesses
• Strong revenue growth of approx. 30% to RMB1.87bn on sustained growth of three core
businesses
• Maintained steady gross profit margin at 46%
• Net profit impacted by one-off items, decreased by 13%
– Recurring net profit increased approx. 17%
• Major corporate actions
– Expansion beyond homebase into Guangxi Zhuang Autonomous Region with first comprehensive flagship project
• Final dividend of HK0.67 cents per share for the year ended 31 December 2016
• Proposed special dividend of HK0.86 cents per share in connection to the expected profit
from disposal of land in 2017
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Core Business SegmentIndustrial Wastewater
TreatmentSludge Treatment
Hazardous Waste
Treatment
Fiscal Period 2016 2015 2016 2015 2016 2015
No. of Projects 7 6 3 3 6 5
Operating Capacity579,500 m3/day
575,000 m3/day
3,442 tonnes/day
3,142 tonnes/day
830,000 tonnes/year
330,000 tonnes/year
Average Utilisation Rate 62% 58% >100% 93% 48% 65%
Achieved growth across all three business segments
• Industrial wastewater treatment:
– Processed volume of six existing industrial wastewater treatment facilities recognised organic growth of 8% YoY
• Sludge treatment:
– Increased overall capacity driven by strong demand from customers
• Hazardous waste treatment:
– Overall increase in operating capacity primarily due to commencement of Nansha Marine Conservation Centre with profitability at 31%
utilisation rate
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Strong pipeline offering high visibility for 2017-8
Projects SegmentBusiness
ModelCapacity
Status/Estimated
Time of Operation
Guangxi Yulin (Water) Water Treatment BOO IWWT: 50,000 m3/day; IWS: 50,000 m3/day 2017 Q2
Guangxi Yulin (Sludge) Solid Waste BOO Sludge: 200 tonnes/day 2017 Q2
Longmen Industry Base Solid Waste BOOSludge: Phase I: 500 tonnes/day
Industrial Solid Waste: 300,000 tonnes/year2017 Q3
Longmen Industry Base Solid Waste BOT Waste-to-energy: 600 tonnes/day 2017 Q3
Yinghong Park (Phase I) Water Treatment BOO IWWT: 20,000 m3/day; IWS: 50,000 m3/day 2017 Q4
Sichuan Guangyuan (Phase I) Water Treatment BOO IWWT: 50,000 m3/day; IWS: 50,000 m3/day 2017 Q4
Yulin Chinese Medicine (Phase I) Water Treatment BOO IWWT: 5,000 m3/day 2018 Q1
Xinfeng Lvzhi Solid Waste BOO Industrial Solid Waste: 350,000 tonnes/year 2018 Q1
Yonghe Haitao (Phase IV) Water Treatment BOO IWWT: 50,000 m3/day Under planning
2016 FY Financial Overview
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2016 FY financial highlights
• Delivered strong topline growth and maintained steady gross profit margin
• Net profit was impacted by one-off items, impairment on non-current assets and foreign exchange loss
2016 FY 2015 FY % Change
Turnover 1,865.9 1,435.0 +30.0%
Gross Profit 852.3 715.5 +19.1%
Profit Attributable to Equity Holders 519.1 598.9 -13.3%
Recurring Net Profit 589.6 503.7 +17.0%
Basic EPS 0.08 0.10 -20%
(RMB mm)
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37%
33%
10%
5%5%
3%7%
Strong sector penetration leading to revenue diversification
50%
25%
6%
3%6%
3%7%
20
16
20
15
Revenue Breakdown by CustomerRevenue Breakdown by Sector
34%
25%
16%
20%
5%
30%
26%
22%
16%
6%
RMB 1,866 mm
RMB 1,435 mm
Textile Automobile Manufacture
Municipalities
Water Treatment
Sludge and Solid Waste Treatment
Hazardous Waste Treatment
BOT Project Construction
Service
Heating Service
Electronic
Chemical Papermaking
Others
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Margins remain stable
EBITDA Margin, Gross Margin and Net Margin
56% 57%
50%55%
54%50%
42%46%
38%42%
28% 28%
1H2015 FY2015 1H2016 FY2016
EBITDA Margin Gross Margin Net Margin
Recurring* EBITDA Margin, Gross Margin
and Net Margin
58% 59% 58% 59%
53% 54% 54% 55%
29% 29% 30% 28%
1H2015 FY2015 1H2016 FY2016Recurring EBITDA Margin Recurring Gross Margin
Recurring Net Margin
*Add back VAT refund to turnover, exclude income from BOT construction services,
entrusted operation and one-off gain/loss
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139.3
256.2
2015 2016
70.2
88.2
2015 2016
9.7% 12.9%
% of Turnover
4.6% 4.5%
Effective interest rate
Administrative Expense Finance Cost
(RMB mm)
Expense analysis
• While costs and expenses increased, the ratio of cost as a percentage of turnover remained steady
13.7%
14.9
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Other financial indicators
As at 31/12/2016 As at 31/12/2015 31/12/2016 vs 31/12/2015
A/R Balance
(RMB million)554.9 411.4 +34.9%
A/R Turnover
(days) 97.5 94.7 +2.8 days
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56.3% 55.8%
31/12/2015 31/12/2016
Maintained healthy gearing ratio
(Total Bank Borrowing – Cash) / Total Equity
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Capital expenditure
27%
50%
65%12%
8%
38%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2016 2015
Water Treatment Sludge and Solid Waste Treatment Hazardous Waste Treatment
RMB 669 mm RMB 1,197 mm
2017 Strategic Focus
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Well-positioned to capture growth
• Government’s commitment to environmental protection
and associated policies increases
• Proven track record of delivering
• Focus on geographical expansion
APPENDIX
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CTEG business model
• CTEG
– Established business with strong track record in industrial wastewater, sludge and solid waste, and hazardous waste
treatment solutions
– Best positioned to capitalise on opportunities brought about by fighting global climate change and national policy
– Solid management team with operational excellence to deliver
Waste generating enterprises
Solid waste treatment facilities
Wastewater treatment facilities
Hazardous waste treatment facilities
CTEG’s major customers
Industrial water supply facilities
Untreated
solid waste
Untreated
hazardous waste
Untreated
wastewater
Reclaimed water (water
recycling)
Industrial water supply
Landfill, incineration and resource utilisation
Landfill, incineration, resource utilisation and concentrated
sewage treatment
Treated wastewater being discharged
Sludge produced in the
wastewater treatment
process Nutrition soil, green brick
and light ceramsite
Sludge treatment facilities
Business Model
Committed to becoming China’s leading fully integrated industrial
waste management solution provider
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120,000 130,000 130,000 130,000
575,000 579,500 675,000 750,000
280,000 280,000
380,000 480,000
2015 2016 2017(E) 2018(E)
Municipal Wastewater Treatment Industrial Wastewater Treatment
Industrial Water Supply
Operating Capacity (m3/day)
Mu
nic
ipa
l
Wa
ste
wa
ter
Tre
atm
en
t
Longmen Xilin
- 20,000m3/day
Yonghe Haitao
Phase I&II
- 100,000m3/day
Zhongshan Shazai
- 10,000m3/day
Ind
ustr
ial W
ate
r
Su
pp
ly
Guangzhou Xinzhou
Industrial Park
- 150,000m3/day
Zhongshan Project
- 60,000 m3 /day
Sichuan Guangyuan
Phase I
-50,000m3/day
Shunde Water
Supply Project
- 70,000m3/day
Sichuan Guangyuan
Phase II (planning)
- 50,000m3/day
Yinghong Park
Phase I
- 50,000m3/day
Yinghong Park
Phase II&III(planning)
- 150,000m3/day
Guangxi Yulin
Phase I
- 50,000m3/day
Ind
ustr
ial W
as
tew
ate
r T
rea
tme
nt
Guangzhou Xinzhou
Industrial Park
- 100,000m3/day
Huaihua Tianyuan
Phase I
- 45,000m3/day
Guangzhou Yinglong
Phase I&II
- 250,000m3/day
Yonghe Haitao
Phase III
- 50,000m3/day
Shunde WWT
Project
- 60,000m3/day
Zhongshan Project
Phase I&II
- 70,000m3/day
Sichuan Guangyuan
Phase I
-50,000m3/day
Guangfozhao
- 50,000m3/day
Sichuan Guangyuan
Phase II (planning)
- 50,000m3/day
Huaihua Tianyuan
Phase II (planning)
- 55,000m3/day
Yinghong Park
Phase I
- 20,000m3/day
Yinghong Park
Phase II&III(planning)
- 60,000m3/day
Yonghe Haitao
Phase IV
- 50,000m3/day
Guangxi Yulin
Phase I
- 50,000m3/day
Project portfolio – water treatment and supply
Guangxi Yulin
Phase II
- 50,000m3/day
Guangxi Yulin
Phase II
- 50,000m3/day
Yulin Chinese
Medicine Phase I
- 5,000m3/day
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Project portfolio - sludge and solid waste treatment
Longmen Industry Base
Industry: Sludge + solid waste
Treatment: – To produce green bricks from sludge and solid waste– To produce light weight ceramsites from sludge – To produce nutrition soil from municipal sludge– Incineration
Capacity: – Sludge: 1,389 tonnes/day (Phase I:500 tonnes/day)– Solid waste: 300,000 tonnes/year (planned)– Waste-to-Energy: 600 tonnes/day
Status: Under construction
Xinfeng Lvzhi
Industry: Industrial solid waste
Treatment:– Comprehensive utilization of industrial solid waste
Capacity:
− Solid waste: 350,000 tonnes/year (planned)
Status: Under construction
Industry: Sludge
Treatment:– To treat municipal sludge and produce
nutrition soil
Capacity: – 900 tonnes/day
Status: In operation
Yonghe Haitao Sludge
Heyuan Solid Waste
Industry: Sludge
Treatment:– Safety treatment and comprehensive
utilization of sludge
Capacity:
− 1,000 tonnes/day Status:In operation
Sludge Treatment Capacity (tonnes/day)
Industry: Sludge + industrial solid waste
Treatment:
− Comprehensive utilization of sludge and
general industrial solid waste
− Safety disposal to landfill
Capacity:
− Sludge: 1,542 tonnes/day
− Solid waste: 100,000 tonnes/year
− Landfill: 2,000,000 m3
Status: In operation
Qingyuan Lvyou
Guangxi Yulin
Industry: Sludge
Treatment:
− To utilize the heat value of sludge
Capacity:
− 200 tonnes/day
Status: Under construction
3,142 3,442 4,142
4,642
2015 2016 2017E 2018E
+700
+500
+300
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Project portfolio - hazardous waste treatment
3 “TBT” Projects
Treatment: Copper etching wastewater (HW22)
Capacity : 61,000 tonnes/year
Model: TOT+BOT, with concession period of 20 years from 2015
to 2035
Status: In operation
Kangxiang Metal
Treatment: – Waste organic solvent (HW06)– Waste mineral oil (HW08)– Waste photosensitive material (HW16)– Surface processing waste (HW17)– Copper etching wastewater (HW22)– Lead bearing waste (HW31)
Total Capacity : 9,500 tonnes/year
Status: In operation
Guangzhou Lvyou
Treatment: Disposal and re-utilization of industrial wastes and
domestic wastes, mainly hazardous waste
Capacity : 259,500 tonnes/year for 20 types of hazardous waste
+ cleaning and recycling used drums of 1,500,000 pcs / year
Status: In operation
Treatment: – Treating oily wastewater, oily sludge, waste oil; typically port
and vessel wastewater, offshore drilling pollutant
Capacity: – HW08: 500,000 tonnes/year
Status: Partially in operation, with future phases under planning
Nansha Marine Conservation Centre
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