Dianchi Water Treatment recorded a steady growth in overall business in FY2018


HONG KONG – (ACN Newswire) – A leading municipal wastewater treatment and reclaimed water supply services provider in Yunnan Province – Kunming Dianchi Water Treatment Co., Ltd. (“Dianchi Water Treatment” or “the Company”, together with its subsidiaries, the “Group”, stock code: 3768), today held 2018 Annual Results announcement – corporate presentation in Hong Kong, announced its annual results for the year ended 31 December 2018.

As the largest scale wastewater treatment company in Yunnan Province, the PRC, and one of the major enterprises implementing the PRC’s strategic goal to treat pollutants at Dianchi Lake, Dianchi Water Treatment enjoys exclusive rights to provide wastewater treatment services in Kunming and certain other areas of China. The concessions help the Company maintain and consolidate its advantages and competitive positions in Yunnan Province, and lay a favorable foundation for its consolidation of water treatment resources near Yunnan Province, and exploration into neighboring regions to achieve cross-region operation.

Leveraging the concession-based business model, technology, the capability of project implementation, and expansion of service regions, the Company has achieved stable income and steady business growth. In 2018, the Company’s revenue was RMB1,430 million, representing an increase of 16.8% over 2017. The net profit attributable to shareholders of the Company was RMB349 million, representing an increase of 11.6% over 2017.

Ms. Guo Yumei, Chairman of Kunming Dianchi Water Treatment Co., Ltd., said, “In 2018, macroeconomic situation was severe and downward pressure on the economy increased. The environmental protection industry experienced a double-pressure test of financial and environmental protection regulation. In the previous year, the Company began the new journey of “new undertakings” with standardized management as the starting point. In the face of complex and ever-changing international and domestic market environment, new changes in the industry, the Company accurately grasped national strategies and new environmental protection policies and identified the juncture of macroeconomic policies and ecological environmental protection policies to clarify work ideas and mission objectives and explore financing potential of international capital markets. The Company also made use of double-platform advantages of international and domestic financing, actively expanded financing channels and developed a portfolio of stock assets revitalization, quality assets diversification and optimization of investment structure to form a benign pattern of mutual promotion of financing and investment and symbiotic coexistence. While achieving sound economic benefits, the Company commenced a new situation for healthy development of the Listing of the Company in the new era and maintained steady income and profit growth, thereby winning recognition and affirmation from the capital market and all walks of life.”

Dianchi Water Treatment sought multi-level and all-round strategic cooperation by focusing on water environment governance and related environmental protection industries, from municipal wastewater treatment to rural micro-polluted water and industrial wastewater, from upstream water resources protection, running water and downstream reclaimed water to business areas such as sludge disposal, derived solid waste industry and thermoelectric gas supply to build a complete water treatment industrial chain and provide better environmental products and environmental services for catering for the environmental needs of the people and the economic development of the country.

With the total volume of wastewater treated in 2018 creating a new record high, the Company successfully completed pollutant emission reduction tasks issued by the local government and sewage treatment operation management continues to maintain industry advance and leading level in Yunnan province. The effluent quality of water purification plants of Kunming City and the lakes of Kunming City was superior to the highest in the industry’s first-class A standard and the comparable average power consumption per ton of water is significantly lower than the industry average. The revenue and profit of reclaimed water business and running water business maintained steady growth.

In terms of technological innovation, the Company’s technological research and development system has basically established, and technological innovation has been advanced in depth and breadth, achieving significant benefits. The technological innovation consciousness and level of each production unit have been raised, from minor reforms and small-scale equipment in the past to transformation and upgrading of utilizing system thinking and system analysis methods to conduct process analysis and achieve precise control and overall process optimization. Benefited by technological innovation as well as transformation and application of results, the Company saved nearly double direct production costs than that of last year which enabled the Company to continuously improve its service capacity for ecological civilization construction in its business area.

Exerting financing advantages and a layout of the entire water treatment
industry chain could be basically formed
In terms of investment and financing, under the background of “strict supervision” and tight capital funds in the domestic financial market, the Company continuously optimized capital structure, fully exploited capital market resources and broadened domestic and overseas financing channels to successfully build a domestic and overseas financing “dual platform” and exert stronger financing advantages. Moreover, by strengthening collection of account receivables, strictly controlling production cost expenditure, strengthening budget management and improving capital utilization, the Company further strengthened financial management control and effectively responded to fluctuation of market liquidity risk.

In accordance with the principles of steady progress and prudent investment, the Company continued to seize development opportunities as well as accelerate endogenous growth and extensive expansion to excavate market potential of industry synergy, so that a layout of the entire water treatment industry chain could be basically formed. The industrial chain extended from municipal sewage treatment to other business areas such as rural micro-polluted water and industrial wastewater, upstream water source protection, running water supply, downstream reclaimed water use, sludge disposal, derived solid waste industry and thermal power supply. Various market projects which effectively improved residents’ ecological environment in the service areas had been unanimously affirmed and praised by the local government and the population. The professional capabilities and corporate image of Dianchi Water Treatment can also be showcased in an all-round manner.

Ms. Guo Yumei, Chairman of Kunming Dianchi Water Treatment Co., Ltd., said, “2019 is an important year for China to implement the 13th Five-Year Plan for national economic and social development to win the battle against pollution. The local governments at all levels have created huge environmental protection needs and broad market space due to macroeconomic policies. For Dianchi Water Treatment, it is a crucial year to take advantages of capital, technology and talent team as an industry-leading enterprise, to seize policy opportunities, expand market share, consolidate development foundation and amplify the development benefits.”

Striving to become the country’s leading water treatment and environmental protection industry base
Looking forward, by adhering to the strategic guidance of “unitary domination with diversified development” and positioning as an integrated service provider providing systematic solutions for water environment management, Dianchi Water Treatment will actively integrate into and serve the national ecological and environmental protection strategy. With the objectives of maximizing the comprehensive benefits of environment, society and economy and adopting policy-driven, market-driven and innovation-driven measures, the Company will continue to consolidate wastewater treatment and related main businesses as well as promote the transformation and application of technological innovation achievements in the main business and related fields to make the Company firmly grasp the leading position of technology in the industry.

Dianchi Water Treatment will use the business model of “solid investment and stable income + operation and sales profit” to implement the investment strategy of “light assets + stable income”. The Company will make good use of the advantages of international and domestic financing dual platforms, sound financial foundation, rich technical reserves, innovative management mode, professional staff to accelerate sustainable improvement in the Company’s market share, core competitiveness, profitability and business performance. The Company will continue to grow during the period of innovation and strive to become the country’s leading water treatment and environmental protection industry base.

Taking advantage of the unique location advantages in Yunnan and market opportunities brought by the “Belt and Road” Initiative, the Company will focus on developing relevant regions in China and selectively enter the South Asian and Southeast Asian market, gradually expand the global market and continuously enlarge our presence in environmental protection market. Meanwhile, in accordance with the relevant requirements for standardized operation of the listed companies and international corporate governance, Dianchi Water Treatment will continue to establish a sound management and control system adaptable to the international and domestic market environment and strengthen financial management and control. The Company will endeavor to create a closed-loop full-cycle assessment system and risk management system “before investment + during investment + post-investment” of projects and strengthen risk management of accounts receivables to strictly prevent liquidity risks and exchange rate risks.

In addition, through actively striving for policy introduction, coordinating with local governments to optimize and adjust the differential classification water price mechanism as well as promote the introduction and implementation of wastewater treatment price adjustment policies, the Company will formulate local sludge use standards as soon as practicable and promote sludge resources utilization and price mechanism of kitchen waste projects to create new sectors for profit growth and improve operation and management efficiency steadily, thereby generating sustainable returns for shareholders.

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