Water and Wastewater Treatment Market in China February 2015
Executive Summary Market
China is facing acute water scarcity with an estimated x bn m3 shortage in the supply of water by the end of 20- The Yth Five Year Plan sets increased impetus to wastewater treatment to ensure quality water supply amidst scarcity in the country
Drivers:
Drivers & Challenges
Trends
Accelerating Urbanization Increasing Industrialization Water Scarcity drives Wastewater Treatment Operations Need for Technological Upgradation High Level of Output by Industries such as Textile and Pulp and Paper Low Coverage Rate of China’s Treated Water Supply
Challenges: Entry Barriers Rapidly Increasing Sludge Water Pricing Mechanism Increasing Electricity Consumption in Wastewater Treatment Plants Drug Resistance Gene Produced by Treatment Plants
Adoption of MBR technology Improved support from banks Heightened exposure through trade shows Major Players
Competitive Landscape
Company A
Company B
Company C
Company D
Company E
Company F
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•Macroeconomic Indicators •Water Situation & Consumption •Water Pollution in China •Wastewater Treatment – Market Overview •Wastewater Treatment Technologies •Wastewater Treatment – Operating Modes •Drivers & Challenges •Trends •Government Bodies and Initiatives •Competitive Landscape •Strategic Recommendations •Appendix WATER AND WASTEWATER TREATMENT IN CHINA 2015.PPT
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It has become essential to develop systems that can more effectively deal with the dual issues…
SAMPLE
China’s Rampant Water Pollution (1/2)
Wastewater – Discharged
• China’s fresh water supply has continued to be exploited in the past three decades and is burdened due to the population and urbanization growth as well as economic development
y4
China has an estimated xx bn m³ per annum of naturallyavailable water from surface and underground sources It stands at the nth position after Brazil, Russia, Canada, Indonesia and the US In spite of this, China’s naturally available water flow per annum, in per capita basis, is one of the lowest levels in the world and is only zth of the world average
x2
24%
y4 x1
y3 y2
49%
26%
y1 20--
20--
Wastewater – Segmentation (20--)
• Main sources of water pollution are: Industrial (chemical, organic, and thermal wastes)
Q1
Q2
Municipal (largely sewage consisting of human wastes, other organic wastes, detergents) Agricultural (animal wastes, pesticides, and fertilizers)
P1%
• Health concerns China has a growing cancer rate, with hundreds of "cancer villages" along the banks of polluted water sources
P2%
The World Health Organization estimated that nearly yy people die annually from water pollution-related illnesses in China, and p% of disease is linked with poor water quality
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Chinese wastewater treatment market offers strong growth potential in the coming years
SAMPLE
Wastewater Treatment – Overview • Water treatment industry is highly fragmented in China • In the 20-- Environmental Performance Index, China ranked xth for wastewater treatment • Some of the chief concerns in this sector are lagging wastewater pipeline networks, low wastewater reuse rate, inefficient infrastructure as well as lack of operational governance
• The Government has planned for an additional yy mn cu m of daily treatment capacity nationwide between 20-- and 20-• In 20--, zz new treatment plants have been constructed which brings the total count of municipal treatment plants the country owns to p
Wastewater Treatment – Capacity y5 +13.9%
y4 y3
x1
x2
x3
x4
20--
20--
20--
20--
x5
x6
x7
x8
y2 y1 20--
20--
WATER AND WASTEWATER TREATMENT IN CHINA 2015.PPT
20--
20— 5
Drivers & Challenges – Summary Challenges Entry Barriers
Drivers
Rapidly Increasing Sludge
Accelerating Urbanization
Water Pricing Mechanism
Increasing Industrialization Water Scarcity drives Wastewater Treatment Operations
Increasing Electricity Consumption in Wastewater Treatment Plants
Need for Technological Upgradation
Drug Resistance Gene Produced by Treatment Plants
High Level of Output by Industries such as Textile and Pulp and Paper Low Coverage Rate of China’s Treated Water Supply
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Increasing urbanization rate continue to aggravate demand for treating wastewater
SAMPLE
Accelerating Urbanization
Impact
• Country’s rapid economic growth has resulted in increase in level of urbanization • Continuous urbanization mounts to higher demand for wastewater treatment and water supply services In comparison with rural areas, urban areas usually have higher per capita water demand
• With the mass migration of people to major cities, many of which are in eastern China, increased water consumption in densely populated coastal provinces aggravates imbalances between water supply and demand • Due to the concentration of industrial, residential and commercial activities in cities, urbanization further drives higher demand for wastewater treatment capacity
Urbanization Rate in China
y5 y4
x2 x1
y3 y2
• In the early 19--s, approx. p% of the population lived in cities compared to the present figure of q% in 20-• Urbanization is slated to accelerate and is expected to constitute z% of China’s total population by the end of 20-• Growing at this rate, it can be estimated that by 20--, China will have about xx cities with more than y mn inhabitants • Therefore, urban demand for water is expected to increase by k% between 20-- to 20--
y1 20--
20--
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Trends – Summary
Adoption of MBR technology
Key Trends Heightened exposure through trade shows
Improved support from banks
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Porter’s Five Forces Analysis
SAMPLE Impact
Threat of New Entrants
Impact
Impact
Bargaining Power of Suppliers
Impact
Bargaining Power of Buyers
Competitive Rivalry
Impact
Threat of Substitutes
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Competitive Benchmarking (1/4) Public Trading Comparables (FY 2013)
Company A
Company B
Company C
Company D
Market Capitalization (USD mn)
Share Price (USD)
EV/EBITDA (x)
EV/Revenue (x)
PE Ratio
Note: Major 4 Public companies based on the Market Capitalization; Market Capitalization, Share Price and PE ratio is as of xx/yy/20-WATER AND WASTEWATER TREATMENT IN CHINA 2015.PPT
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Competitive Benchmarking (2/4) Key Ratios of Major 3 Companies – Operational Basis (FY 2013) (1/3) Gross Margin
%
z6 z5
Operating Margin
Net Margin
a2 a1
z4
c2 b2
b1
a3 b3
c1
z3
c3
z2 z1 Company A
Company B
Company C
• Text • Text • Text
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SAMPLE
Public: Domestic Company – Company A (1/4) Company Information
Locations – China
Corporate Address Tel No. Fax No. Website Year of Incorporation Ticker Symbol Stock Exchange
Products and Services Category X1 X2
Headquarters
Products/Services
Key People Name
Designation
Person 1 Person 1 Person 1 Person 1
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SAMPLE
Public: Domestic Company – Company A (2/4) Financial Snapshot Total Income
Total Income USD mn
y3
Key Ratios Net Profit/Loss
z3
z4
z1
z2
x1
x2
x3
x4
y2
Profit USD mn
100
y1
50 0
20--
20--
20--
20--
Financial Summary
• The company reported total income of USD 803.5 mn in FY 2013, registering an increase of 29.28% over FY 2012 • The company earned an operating margin of 17.26% in FY 2013 a decrease of 5.38 percentage points over FY 2012 • The company reported debt to equity ratio of 0.88 in FY 2013, a decrease of 1.97% over FY 2012
Key Financial Performance Indicators Market Capitalization (USD mn) Total Enterprise Value (USD mn) EPS (USD) PE Ratio (Absolute)
y-o-y change 2013 (2013-12)
2012
2011
2010
Profitability Ratios Operating Margin Net Margin Profit Before Tax Margin Return on Equity Return on Capital Employed Return on Working Capital Return on Assets Return on Fixed Assets
Cost Ratios
• The company earned a net profit of USD 98.4 mn in FY 2013, as compared to net profit of USD 95.1 mn in FY 2012
Indicators
Particulars
Value
Operating costs (% of Sales) Administration costs (% of Sales) Interest costs (% of Sales)
Liquidity Ratios Current Ratio Cash Ratio
Leverage Ratios Debt to Equity Ratio Debt to Capital Ratio Interest Coverage Ratio
Efficiency Ratios Fixed Asset Turnover Asset Turnover Current Asset Turnover Working Capital Turnover Capital Employed Turnover Improved
WATER AND WASTEWATER TREATMENT IN CHINA 2015.PPT
Decline
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SAMPLE
Public: Domestic Company – Company A (3/4) Key Business Segments
Key Geographic Segments
Construction of Water Supply
Hotel Operations
Waste Disposal
Expressways
Land 1 Second-Level Development
Others
b3
x3 y3
b2
a3
x1 y1
a2 q1
a1
x2 r1 z1 p1
20--
y2 q2
r2 z2 p2
20--
q3
r3 z3 p3
20--
China The company has been operating only in China for the past 3 years d1
b1 20--
Business Highlights Description
News
Overview
• Text
Operational Capacity
• Text
Upcoming Projects
• Text
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SAMPLE
Public: Domestic Company – Company A (4/4)
S
W
O
T
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