201 017 I 7 Int nterim Res m Results Presen entation 25 - PowerPoint PPT Presentation

Stoc ock C Code: ode: 136 363. 3.HK 201 017 I 7 Int nterim Res m Results Presen entation 25 August, 2017

Disclaimer This presentation incorporates information contained in the interim results announcement (the “Results Announcement”) for the six months ended 30 June 2017 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.

Agenda  Management Speech  Strategic Focus  Improvement on Internal Control  Financial Overview  Q&A

Management Speech  Mr. Tsui Cham To, Chairman  Mr. Lu Yili, Honorary Chairman  Mr. Xu Zhencheng, CEO & Executive Director

Strategic Focus Mr. Xu Zhencheng, CEO & Executive Director

Improvement on Internal Control Mr. Du Daohong, GM & Chief Internal Control Officer

Tasks accomplished: I. The internal control function is established and led by Dr. Du Daohong II. Engaged KPMG as an external advisor and a three-year (2016-2018) improvement scheme is carried out III. Training on connected transaction among board of directors was organized in May

2017 IR Financial Overview Mr. Edwin Ma, Chief Financial Officer

2017 IR financial highlights RMB (mm) 1H2017 1H2016 % Change Turnover 881.8 1,082.4 -18.5% Turnover excluding BOT 785.1 758.6 +3.5% construction revenue Gross Profit 397.9 451.1 -11.8% Profit Attributable to 337.3 304.1 +10.9% Equity Holders Net profit excluding BOT 325.2 262.3 +24.0% construction profit Basic EPS 0.05 0.05 -

Revenue diversification continued Revenue Breakdown by Segment Revenue Breakdown by Customer RMB 881.8mm 8% 10% 2% 27% 5% 14% 37% 6% 1H2017 7% 25% 26% 33% BOT Project Construction Textile Automobile Manufacture Others Water Treatment Service Sludge and Solid Waste Treatment Municipalities Electronic Hazardous Waste Treatment Heating Service Chemical Papermaking RMB 1,082.4mm 1H2016 5% 3% 7% 23% 5% 5% 37% 32% 10% 20% 20% 33%

Margins analysis Recurring* EBITDA Margin, Gross Margin EBITDA Margin, Gross Margin and Net Margin and Net Margin 59% 59% 58% 56% 57% 55% 55% 50% 50% 55% 54% 54% 52% 46% 45% 42% 42% 38% 30% 30% 29% 28% 28% 28% FY2015 1H2016 FY2016 1H2017 FY2015 1H2016 FY2016 1H2017 Recurring EBITDA Margin Recurring Gross Margin EBITDA Margin Gross Margin Net Margin Recurring Net Margin *Add back VAT refund to turnover, exclude income from BOT construction services, entrusted operation and one-off gain/loss

Expense analysis (RMB mm) Administrative Expense Finance Cost 14.8% 4.5% 8.7% 3.5% 130.1 93.8 47.1 43.4 1H2016 1H2017 1H2016 1H2017 Effective interest rate % of turnover

Other financial indicators As at As at 30/06/2017 vs 31/12/2016 30/06/2017 31/12/2016 A/R Balance (RMB million) 609.7 584.7 +4.3% A/R Turnover (days) 121.9 97.5 +24.4 days

Gearing ratio (Total Bank Borrowing – Cash) / Total Equity 66.4% 55.8% 30/06/2017 31/12/2016

Capital expenditure RMB 639 mm RMB 130 mm 100% 5% 90% 12% 27% 80% 70% 60% 50% 49% 83% 40% 30% 20% 24% 10% 0% 1H2017 1H2016 Water Treatment Sludge and Solid Waste Treatment Hazardous Waste Treatment

Q&A

APPENDIX

CTEG business model  Established business with strong track record in industrial wastewater, sludge and solid waste, and hazardous waste treatment solutions  Best positioned to capitalize on opportunities brought about by fighting global climate change and national policy  Solid management team with operational excellence to deliver Business Model Solid waste treatment facilities Untreated solid waste CTEG’s major customers Landfill, incineration and resource utilisation Hazardous waste treatment facilities Untreated Waste generating hazardous waste Landfill, incineration, resource utilisation and concentrated enterprises sewage treatment Wastewater treatment facilities Untreated Industrial water supply wastewater Treated wastewater being discharged Sludge treatment facilities Sludge produced in the Industrial water supply facilities wastewater treatment Nutrition soil, green brick Reclaimed water (water process and light ceramsite recycling) Committed to becoming China’s leading one-stop industrial waste management solution provider

Forge ahead at a stage that challenges and opportunities co-exist  Flagship project in Guangxi commenced trial operation on 20 May 2017 The first innovative industrial park nationwide that environmental protection precedes industrial production – Centralized treatment of industrial wastewater and sludge with prospective future planning of solid waste and – hazardous waste treatment Plus an extension of services to utilities: supply of water, electricity and heat –  New projects secured to further expand the revenue base of the Group I. Yulin Traditional Chinese Medicine Health Industrial Park IWWT project with a total planned treatment capacity of 30,000 m 3 /day II. Yonghe Haitao Phase 4 was added a planning of Municipal WWT with daily treatment capacity of 50,000m 3 III. Successive winning of two tenders with regard to river remediation services  First drawdown of ADB loan made on 20 June 2017 Principal amount of RMB230 million with a fixed interest rate and 10-year tenure – Continuous communication with ADB to work on the next step –

Ongoing business expansion Pipeline projects listed for 2017-2019 Estimated Business Projects Segment Capacity Time of Model Operation Guangxi Yulin (Sludge) Solid Waste BOO Sludge: 200 tonnes/day 2017 Q3 Longmen Industry Base Solid Waste BOO Industrial Solid Waste: 300,000 tonnes/year 2017 Q4 Longmen Industry Base Solid Waste BOT Waste-to-energy: 600 tonnes/day 2017 Q4 Longmen Industry Base Solid Waste BOO Sludge: Phase I: 500 tonnes/day 2018 Q1 Water IWWT: 50,000 m3/day; Sichuan Guangyuan (Phase I) BOO 2018 Q1 Treatment IWS: 50,000 m3/day Water Yulin Chinese Medicine (Phase I) BOO IWWT: 5,000 m3/day 2018 Q1 Treatment Water IWWT: 50,000 m3/day; Guangxi Yulin (Phase II) BOO 2018 Q1 Treatment IWS: 50,000 m3/day Water IWWT: 20,000 m3/day; Yinghong Park (Phase I) BOO 2018 Q2 Treatment IWS: 50,000 m3/day Water Yonghe Haitao (Phase IV) BOT MWWT: 50,000 m3/day 2018 Q4 Treatment Water Yonghe Haitao (Phase IV) BOO IWWT: 50,000 m3/day 2019 1H Treatment