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

201 017 I 7 Int nterim Res m Results Presen entation

25 August, 2017

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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

• Mr. Du Daohong, GM & Chief Internal Control Officer

Improvement on Internal Control

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 construction revenue 785.1 758.6 +3.5% Gross Profit 397.9 451.1

• 11.8%

Profit Attributable to Equity Holders 337.3 304.1 +10.9% Net profit excluding BOT construction profit 325.2 262.3 +24.0% Basic EPS 0.05 0.05

37% 33% 7% 6% 5% 2% 10%

Revenue diversification continued

37% 33% 10% 5% 5% 3% 7%

1H2017 1H2016 Revenue Breakdown by Customer Revenue Breakdown by Segment

23% 20% 20% 32% 5% 27% 26% 25% 14% 8%

RMB 881.8mm RMB 1,082.4mm

Water Treatment Sludge and Solid Waste Treatment Hazardous Waste Treatment BOT Project Construction Service Heating Service Textile Automobile Manufacture Municipalities Electronic Chemical Papermaking Others

EBITDA Margin, Gross Margin and Net Margin

57% 50% 55% 55% 50% 42% 46% 45% 42% 28% 28% 38% FY2015 1H2016 FY2016 1H2017 EBITDA Margin Gross Margin Net Margin

Recurring* EBITDA Margin, Gross Margin and Net Margin

59% 58% 59% 56% 54% 54% 55% 52% 29% 30% 28% 30% FY2015 1H2016 FY2016 1H2017 Recurring EBITDA Margin Recurring Gross Margin Recurring Net Margin

*Add back VAT refund to turnover, exclude income from BOT construction services, entrusted operation and one-off gain/loss

Margins analysis

8.7% 14.8% % of turnover 93.8 130.1 1H2016 1H2017 47.1 43.4 1H2016 1H2017 4.5% 3.5% Effective interest rate

Administrative Expense Finance Cost

(RMB mm)

Expense analysis

Other financial indicators

As at 30/06/2017 As at 31/12/2016 30/06/2017 vs 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

66.4% 55.8% 30/06/2017 31/12/2016

Gearing ratio

(Total Bank Borrowing – Cash) / Total Equity

Capital expenditure

83% 24% 12% 49% 5% 27%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

1H2017 1H2016

Water Treatment Sludge and Solid Waste Treatment Hazardous Waste Treatment

RMB 639 mm RMB 130 mm

Q&A

APPENDIX

CTEG business model

Committed to becoming China’s leading one-stop industrial waste management solution provider

 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

Waste generating enterprises

CTEG’s major customers

Untreated solid waste Untreated hazardous waste Untreated wastewater Reclaimed water (water recycling) Industrial water supply

Landfill, incineration and resource utilisation Landfill, incineration, resource utilisation and concentrated sewage treatment Treated wastewater being discharged

Sludge produced in the wastewater treatment process

Nutrition soil, green brick and light ceramsite

Business Model

Solid waste treatment facilities Hazardous waste treatment facilities Wastewater treatment facilities Industrial water supply facilities Sludge treatment facilities

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

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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

• f 30,000 m3/day

II. Yonghe Haitao Phase 4 was added a planning of Municipal WWT with daily treatment capacity of 50,000m3 III. Successive winning of two tenders with regard to river remediation services

 First drawdown of ADB loan made on 20 June 2017

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Principal amount of RMB230 million with a fixed interest rate and 10-year tenure

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Continuous communication with ADB to work on the next step

Ongoing business expansion

Pipeline projects listed for 2017-2019

Projects Segment Business Model Capacity Estimated Time of 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 Sichuan Guangyuan (Phase I) Water Treatment BOO IWWT: 50,000 m3/day; IWS: 50,000 m3/day 2018 Q1 Yulin Chinese Medicine (Phase I) Water Treatment BOO IWWT: 5,000 m3/day 2018 Q1 Guangxi Yulin (Phase II) Water Treatment BOO IWWT: 50,000 m3/day; IWS: 50,000 m3/day 2018 Q1 Yinghong Park (Phase I) Water Treatment BOO IWWT: 20,000 m3/day; IWS: 50,000 m3/day 2018 Q2 Yonghe Haitao (Phase IV) Water Treatment BOT MWWT: 50,000 m3/day 2018 Q4 Yonghe Haitao (Phase IV) Water Treatment BOO IWWT: 50,000 m3/day 2019 1H