Water and Wastewater Treatment Market in China

February 2015

Executive Summary
Market

China is facing acute water scarcity with an estimated x bn m3 shortage in the supply of water by
the end of 20- The Yth Five Year Plan sets increased impetus to wastewater treatment to ensure quality water
supply amidst scarcity in the country

Drivers:

Drivers &
Challenges

Trends

Accelerating Urbanization
Increasing Industrialization
Water Scarcity drives Wastewater Treatment
Operations
Need for Technological Upgradation
High Level of Output by Industries such as
Textile and Pulp and Paper
Low Coverage Rate of Chinas Treated Water
Supply

Challenges:
Entry Barriers
Rapidly Increasing Sludge
Water Pricing Mechanism
Increasing Electricity Consumption in
Wastewater Treatment Plants
Drug Resistance Gene Produced by
Treatment Plants

Adoption of MBR technology

Improved support from banks
Heightened exposure through trade shows
Major Players

Competitive
Landscape

Company A

Company B

Company C

Company D

Company E

Company F

WATER AND WASTEWATER TREATMENT IN CHINA 2015.PPT

Macroeconomic Indicators
Water Situation & Consumption
Water Pollution in China
Wastewater Treatment Market
Overview
Wastewater Treatment Technologies
Wastewater Treatment Operating
Modes
Drivers & Challenges
Trends
Government Bodies and Initiatives
Competitive Landscape
Strategic Recommendations
Appendix
WATER AND WASTEWATER TREATMENT IN CHINA 2015.PPT

It has become essential to develop systems that can more

effectively deal with the dual issues

SAMPLE

Chinas Rampant Water Pollution (1/2)

Wastewater Discharged

Chinas fresh water supply has continued to be

exploited in the past three decades and is burdened due
to the population and urbanization growth as well as
economic development

y4

China has an estimated xx bn m per annum of naturallyavailable water from surface and underground sources
It stands at the nth position after Brazil, Russia, Canada,
Indonesia and the US
In spite of this, Chinas naturally available water flow per
annum, in per capita basis, is one of the lowest levels in the
world and is only zth of the world average

x2

24%

y4
x1

y3
y2

49%

26%

y1
20--

20--

Wastewater Segmentation (20--)

Main sources of water pollution are:

Industrial (chemical, organic, and thermal wastes)

Q1

Q2

Municipal (largely sewage consisting of human wastes, other

organic wastes, detergents)
Agricultural (animal wastes, pesticides, and fertilizers)

P1%

Health concerns
China has a growing cancer rate, with hundreds of "cancer
villages" along the banks of polluted water sources

P2%

The World Health Organization estimated that nearly yy

people die annually from water pollution-related illnesses in
China, and p% of disease is linked with poor water quality

WATER AND WASTEWATER TREATMENT IN CHINA 2015.PPT

Chinese wastewater treatment market offers strong growth

potential in the coming years

SAMPLE

Wastewater Treatment Overview

Water treatment industry is highly fragmented in China
In the 20-- Environmental Performance Index, China ranked xth for wastewater treatment
Some of the chief concerns in this sector are lagging wastewater pipeline networks, low wastewater reuse rate,
inefficient infrastructure as well as lack of operational governance

The Government has planned for an additional yy mn cu m of daily treatment capacity nationwide between 20-- and
20- In 20--, zz new treatment plants have been constructed which brings the total count of municipal treatment plants the
country owns to p

Wastewater Treatment Capacity

y5
+13.9%

y4
y3

x1

x2

x3

x4

20--

20--

20--

20--

x5

x6

x7

x8

y2
y1
20--

20--

WATER AND WASTEWATER TREATMENT IN CHINA 2015.PPT

20--

20
5

Drivers & Challenges Summary

Challenges
Entry Barriers

Drivers

Rapidly Increasing Sludge

Accelerating Urbanization

Water Pricing Mechanism

Increasing Industrialization
Water Scarcity drives Wastewater
Treatment Operations

Increasing Electricity Consumption in

Wastewater Treatment Plants

Need for Technological Upgradation

Drug Resistance Gene Produced by

Treatment Plants

High Level of Output by Industries

such as Textile and Pulp and Paper
Low Coverage Rate of Chinas Treated
Water Supply

WATER AND WASTEWATER TREATMENT IN CHINA 2015.PPT

Increasing urbanization rate continue to aggravate demand

for treating wastewater

SAMPLE

Accelerating Urbanization

Impact

Countrys rapid economic growth has resulted in increase in level of urbanization

Continuous urbanization mounts to higher demand for wastewater treatment and water supply
services
In comparison with rural areas, urban areas usually have higher per capita water demand

With the mass migration of people to major cities, many of which are in eastern China,
increased water consumption in densely populated coastal provinces aggravates imbalances
between water supply and demand
Due to the concentration of industrial, residential and commercial activities in cities,
urbanization further drives higher demand for wastewater treatment capacity

Urbanization Rate in China

y5
y4

x2
x1

y3
y2

In the early 19--s, approx. p% of the population lived in

cities compared to the present figure of q% in 20- Urbanization is slated to accelerate and is expected to
constitute z% of Chinas total population by the end of 20- Growing at this rate, it can be estimated that by 20--, China
will have about xx cities with more than y mn inhabitants
Therefore, urban demand for water is expected to increase
by k% between 20-- to 20--

y1
20--

20--

WATER AND WASTEWATER TREATMENT IN CHINA 2015.PPT

Trends Summary

Adoption of MBR
technology

Key
Trends
Heightened exposure
through trade shows

Improved support from

banks

WATER AND WASTEWATER TREATMENT IN CHINA 2015.PPT

Porters Five Forces Analysis

SAMPLE
Impact

Threat of New Entrants

Impact

Impact

Bargaining Power of Suppliers

Impact

Bargaining Power of Buyers

Competitive Rivalry

Impact

Threat of Substitutes

WATER AND WASTEWATER TREATMENT IN CHINA 2015.PPT

Competitive Benchmarking (1/4)

Public Trading Comparables (FY 2013)

Company A

Company B

Company C

Company D

Market Capitalization (USD mn)

Share Price (USD)

EV/EBITDA (x)

EV/Revenue (x)

PE Ratio

Note: Major 4 Public companies based on the Market Capitalization; Market Capitalization, Share Price and PE ratio is as of xx/yy/20-WATER AND WASTEWATER TREATMENT IN CHINA 2015.PPT

10

Competitive Benchmarking (2/4)

Key Ratios of Major 3 Companies Operational Basis (FY 2013) (1/3)
Gross Margin

z6
z5

Operating Margin

Net Margin

a2
a1

z4

c2
b2

b1

a3
b3

c1

z3

c3

z2
z1
Company A

Company B

Company C

Text
Text
Text

WATER AND WASTEWATER TREATMENT IN CHINA 2015.PPT

11

SAMPLE

Public: Domestic Company Company A (1/4)

Company Information

Locations China

Corporate Address
Tel No.
Fax No.
Website
Year of Incorporation
Ticker Symbol
Stock Exchange

Products and Services

Category
X1
X2

Headquarters

Products/Services

Key People
Name

Designation

Person 1
Person 1
Person 1
Person 1

WATER AND WASTEWATER TREATMENT IN CHINA 2015.PPT

12

SAMPLE

Public: Domestic Company Company A (2/4)

Financial Snapshot
Total Income

Total Income
USD mn

y3

Key Ratios
Net Profit/Loss

z3

z4

z1

z2

x1

x2

x3

x4

y2

Profit
USD mn

100

y1

50
0

20--

20--

20--

20--

Financial Summary

The company reported total income of USD 803.5 mn in FY 2013,

registering an increase of 29.28% over FY 2012
The company earned an operating margin of 17.26% in FY 2013 a
decrease of 5.38 percentage points over FY 2012
The company reported debt to equity ratio of 0.88 in FY 2013, a
decrease of 1.97% over FY 2012

Key Financial Performance Indicators

Market Capitalization (USD mn)
Total Enterprise Value (USD mn)
EPS (USD)
PE Ratio (Absolute)

y-o-y change
2013
(2013-12)

2012

2011

2010

Profitability Ratios
Operating Margin
Net Margin
Profit Before Tax Margin
Return on Equity
Return on Capital Employed
Return on Working Capital
Return on Assets
Return on Fixed Assets

Cost Ratios

The company earned a net profit of USD 98.4 mn in FY 2013, as

compared to net profit of USD 95.1 mn in FY 2012

Indicators

Particulars

Value

Operating costs (% of Sales)

Administration costs (% of
Sales)
Interest costs (% of Sales)

Liquidity Ratios
Current Ratio
Cash Ratio

Leverage Ratios
Debt to Equity Ratio
Debt to Capital Ratio
Interest Coverage Ratio

Efficiency Ratios
Fixed Asset Turnover
Asset Turnover
Current Asset Turnover
Working Capital Turnover
Capital Employed Turnover
Improved

WATER AND WASTEWATER TREATMENT IN CHINA 2015.PPT

Decline

13

SAMPLE

Public: Domestic Company Company A (3/4)

Key Business Segments

Key Geographic Segments

Construction of Water Supply

Hotel Operations

Waste Disposal

Expressways

Land 1 Second-Level Development

Others

b3

x3
y3

b2

a3

x1
y1

a2
q1

a1

x2
r1
z1 p1

20--

y2
q2

r2
z2 p2

20--

q3

r3
z3 p3

20--

China
The company has been
operating only in China
for the past 3 years
d1

b1
20--

Business Highlights
Description

News

Overview

Text

Operational Capacity

Text

Upcoming Projects

Text

WATER AND WASTEWATER TREATMENT IN CHINA 2015.PPT

14

SAMPLE

Public: Domestic Company Company A (4/4)

WATER AND WASTEWATER TREATMENT IN CHINA 2015.PPT

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Thank you for the attention

Water and Wastewater Treatment Market China report is part of Netscribes Retail and
Services Series.
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