SIIC Environment’s profits soar 30.8% to $18.59m in Q1

Due to higher water treatment, supply sales volume.

SIIC Environment posted a 30.8% YoY increase to RMB89.45m (roughly $18.59m) in its Q1 net profit attributable to shareholders. This is thanks to revenue growth in all its categories boosting overall revenue by a whopping 50.6% YoY to RMB563m ($117.03).

According to the company’s news release, the company enjoyed rising amounts of construction activities in progress, higher water treatment and supply sales volume, and positive contribution by newly acquired entities. Service income also went up due to a newly acquired asset in 2QFY15.

Meanwhile, RHB notes in a report that SIIC Environment has confirmed its dual-listing in Hong Kong by the end of the year. This could boost the company's liquidity, as well as reduce SIIC Environment’s financing costs.

In addition, there is a positive signal that capacity growth will surpass target. Should SIIC Environment's acquisition of Longjiang Environmental Protection Group go through, SIIC Environment could exceed its target of 1-1.5m tonnes/day annual capacity increment.

SIIC Environment also has over 80 wastewater treatment plants and is poised to bag more sludge treatment projects within the vicinity of its facilities. As sludge treatment projects usually typically yield a much higher IRR than wastewater treatment project, any significant sludge projects awarded to SIIC Environment would help boost its ROE.