[ET Net News Agency, 5 June 2018] HSBC Global Research hosted a NDR with China Conch
Venture's (CCV)(00586) Chairman Guo Jingbin and other senior management in Europe in the
last week of May.
It noted that management is confident its core environmental business will start to bear
fruit in 2018, with over 50% y-y earnings growth in the coming years driven by the solid
and hazardous waste business (shorter payback period of three years), and the waste to
energy business (longer payback period of over eight years with non-cash construction
earnings).
CCV has aggressive targets for solid and hazardous waste capacity of 1.3/2.4/5.0mt by
2018-20 (YE2017 was 0.54mt) and grate furnace capacity of 1.4/2.8/5.0mt by 2018-20 (YE2017
was 0.37mt). It has already obtained pipelines for the respective targets for 2019.
The company is running close to net cash, with RMB1.5bn cash on hand and expects capex
of RMB2bn this year. HSBC believes CCV's balance sheet can comfortably handle the current
expansion target without equity placement risk. The research house maintained its "buy"
rating on CCV, with a target price of HK$33. (KL)