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快讯：环保行业
Gary Wong 黄家玮
+852 2509 2616
[email protected]
16 April 2015
Action Plan on Water Pollution Prevention and Treatment
Released
GTJA Research 国泰君安研究
Flash Note: Environmental Protection Sector
水污染防治行动计划出台

State Council announced today the “Action Plan on Water Pollution Prevention and Treatment” (“Water Ten”),
which stated that by 2020, the national water quality should reach an improvement stage. By 2030, should
strive to improve the overall water quality of the environment comprehensively. By mid-century, the quality of the
overall ecological environment should comprehensively improve, and the ecosystem to achieve a virtuous cycle. Main
indicators should include, by 2020 and 2030, overall ratio of seven key river basin water quality reaching good level (or
better than Class Ⅲ) should be more than 70% and more than 75% respectively, black smelly water level for urban
districts or above should be controlled under 10% and to 0% respectively, proportion of districts and urban centralized

We think that “Water Ten” goal is difficult to achieve given the current situation. According to “2013 China Environment
Report”, water quality level was very low, except for Yangtze River (78.0%), Pearl River (85.1%) and the Songhua River
(73.5%), reaching over 70% for water quality belonging to good level, Yellow River was at 45.3%, Liaohe was even at
21.4%. CCTV news reported that the completion of the "Water" might require a total investment of about RMB4
trillion to RMB5 trillion, of which RMB1.5 trillion will be funded by the local governments. In addition, RMB2
trillion of the total investment will be invested in the next 3 years. Considering the current situation being grim and
time is running out to achieve the goal, the subsequent investment may further increase.

We expect to achieve a better scale, industry merger will accelerate. We think water enterprises with SOE background
should have an advantage (capital edge and brand names edge) in the consolidation. BEWG (00371 HK) current
valuation of 25.3x/20.4x/16.4x FY15/16/17 PER, with an expected EPS CAGR of at least 25% for the next 3 years,
PEG is at only 0.8x, should be low. Maintain “Buy” with a TP of HKD7.50. China Everbright International (00257
HK) acquired Singapore listed Hankore (now China Everbright Water) and injected water treatment businesses, such
businesses develop fast, current water assets are at 1/6 that of BEWG. Maintain “Accumulate”. We pick BEWG as the
industry top pick.

国务院于今日正式公布“水污染防治行动计划”(“水十条”)，提出到 2020 年，全国水环境质量得到阶段性改善。到 2030 年，力争全国水
环境质量总体改善。到本世纪中叶，生态环境质量全面改善，生态系统实现良性循环。其主要指标包括到 2020 年及 2030 年，七大重点
流域水质优良（达到或优于Ⅲ类）比例总体达到 70%以上及 75%以上，地级及以上城市建成区黑臭水体分别均控制在 10%以内及 0%，
Environmental Protection Sector 环保行业
drinking water quality of Class Ⅲ should be better than higher than 93% and 95% respectively, etc.
地级及以上城市集中式饮用水水源水质达到或优于Ⅲ类比例总体高于 93%及 95%等。

我们认为要达到“水十条”的目标，以现时情况看有一定困难。根据 2013 年中国环境公报显示，七大流域达标率除长江(78.0%)、珠江
(85.1%)及松花江(73.5%)超过 70%外，水质优良率均甚低，如黄河为 45.3%，辽河只有 21.4%。据央视新闻报导称，完成 “水十条”
相应的投资约 4 至 5 万亿元(人民币，下同)，而需各级地方政府投入资金约为 1.5 万亿元。另外，近三年投入约为 2 万亿元。考虑到现
时形势严峻以及目标达到的时间紧迫，后续投资可能进一步加大。

预计为达到更佳的规模效应，行业并购将加快。我们认为具有国企背景的水务企业，于行业整合大潮将更有优势(资金以及品牌优势)。
北控水务(00371 HK)现时估值为 25.3/20.4/16.4 倍的 2015/2016/2017 年预期市盈率，以未来 3 年每股盈利复合年增长率至少 25%计，
现时市盈增长率只有 0.8 倍，属偏低，维持“买入”评级及 7.50 港元的目标价。光大国际(00257 HK)购新加坡上市公司汉科(现为中国光
大水务)并注入水处理业务后，该业务发展迅速，公司的水务资产规模约为北控水务的 1/6。维持“收集”评级。我们以北控水务作为行业
Flash Note
的首选股。
See the last page for disclaimer
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Company Rating Definition
The Benchmark: Hong Kong Hang Seng Index
Rating
Definition
Buy
Relative Performance >15%;
or the fundamental outlook of the company or sector is favorable.
Relative Performance is 5% to 15%;
or the fundamental outlook of the company or sector is favorable.
Accumulate
Neutral
Relative Performance is -5% to 5%;
or the fundamental outlook of the company or sector is neutral.
Reduce
Relative Performance is -5% to -15%;
or the fundamental outlook of the company or sector is unfavorable.
Sell
Relative Performance <-15%;
or the fundamental outlook of the company or sector is unfavorable.
16 April 2015
Time Horizon: 6 to 18 months
Sector Rating Definition
The Benchmark: Hong Kong Hang Seng Index
Definition
Relative Performance >5%;
or the fundamental outlook of the sector is favorable.
Neutral
Relative Performance is -5% to 5%;
or the fundamental outlook of the sector is neutral.
Underperform
Relative Performance <-5%;
or the fundamental outlook of the sector is unfavorable.
DISCLOSURE OF INTERESTS
(1)
(2)
(3)
(4)
The Analysts and their associates do not serve as an officer of the new listing applicant mentioned in this Research Report.
The Analysts and their associates do not have any financial interests in relation to the new listing applicant mentioned in this Research
Report.
Except for Shandong Chenming Paper Holdings Limited-H shares (01812), China All Access (Holdings) Limited (00633), Guangshen
Railway Company Limited-H shares (00525), Guotai Junan International Holdings Limited (01788) and Binhai Investment Company
Limited (02886), Guotai Junan and its group companies do not hold equal to or more than 1% of the issued share capital of the new
listing applicant mentioned in this Research Report.
Guotai Junan and its group companies have not had investment banking relationships with Beijing Enterprise Water Group (00371
HK)/China Everbright International (00257 HK)/Dongjiang Environmental Protection (00895 HK) mentioned in this Research Report
within the preceding 12 months.
Environmental Protection Sector 环保行业
Time Horizon: 6 to 18 months
Rating
Outperform
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Flash Note
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