Transcript Gold Market - University of Hong Kong

WATER INDUSTRY IN
CHINA & CHINA WATER
AFFAIRS GROUP LIMITED
(0855)
Liu Ka Ling 2008649735
Water Shortage in China
China is one of the most water-deficient
countries in the world
 According to the World Bank, water resources
per capita in China (2,156m3) is only ¼ of the
global average while its water consumption (per
unit of GDP) is 5.5x the global average
 Over 400 out of 660 cities suffer from water
shortage
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Water Pollution in China
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50% of the country’s wastewater was
released into rivers and seas without
treatment, causing ecological problems and
substantial loss for fisheries
62% of the water flows from the seven
major river basins is non-potable; Over 50%
of China’s water resources are nondrinkable
Water pollution may cost China up to RMB
199 billion per year
Water shortage, insufficient water usage and
pollution can cost 8-10% of the China’s GDP
Growth Opportunities
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Strong government supports
RMB 143bn will be spent in urban water supply
during 2006-10
Growth Opportunities
Under-penetration -In China, 54% of households are not connected
to water pipelines, 74% are not equipped with
bathing facilities and 77% lack proper or any type
of lavatories
 Under-investment -Majority of water utilities are held by
governments
 Change in water usage patterns due to
urbanization and industrialization
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China Water Affairs Group Limited
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China Water Affairs Group
(stock code: 0855).
one of the largest integrated water affairs
operators providing raw water, tap water,
hydroelectric power, sewage treatment and
related value-added services.
The Group’s businesses in mainland China
span across 20 cities.
The Group has established strong
collaboration platforms with the China
Ministry of Water Resources
Some Business Review
(I) Water Supply Business Analysis
In 2009, the revenue from city water supply
amounted to approximately HK$385.9 million
(2008: HK$255.2 million), representing an
increase of 51.2% as compared with last year. The
revenue from water supply related installation
works amounted to approximately HK$271.0
million (2008: HK$128.7 million), representing an
increase of 110.5% as compared with last year.
Some Business Review

II) Sewage Business Analysis
In 2009, the Group has recorded turnover from
sewage treatment business of HK$29.6 million
(2008: HK$26.8 million). For the year ended 31
March 2009, the profit after tax and the profit
after tax but before amortization of cost of
franchise of that sewage treatment business is
amounted to approximately HK$11.1 million and
HK$17 million, respectively.
Q &A