SIIC Environment hinges growth on recent acquisitions

Longjiang Group profits could rise 20% annually through 2018.

SIIC will continue to journey up the ladder to be an industry leader with its recent acquisitions of Longjiang Group and Ranhill Water as instruments enabling it to gain a stronger foothold in north-eastern China and break into the industrial wastewater market, said RHB.

SIIC Environmental's (SIIC) total design capacity has grown to over 10m tonnes/day from 7m tonnes/day, after it acquired Longjiang Environmental Protection Group (Longjiang Group) last month.

Longjiang Group profits could rise 20% annually through 2018.

SIIC will continue to journey up the ladder to be an industry leader with its recent acquisitions of Longjiang Group and Ranhill Water as instruments enabling it to gain a stronger foothold in north-eastern China and break into the industrial wastewater market, said RHB.

SIIC Environmental's (SIIC) total design capacity has grown to over 10m tonnes/day from 7m tonnes/day, after it acquired Longjiang Environmental Protection Group (Longjiang Group) last month.

With that, RHB expects Longjiang Group to lift SIIC's full-year earnings, in 4Q16.

It also notes that Management's guidance was also assuring. Its CFO, Mr Xu Zhan, thinks Longjiang Group's net profit could grow at least 20% pa over FY17-18.

SIIC also acquired a 60% stake in Ranhill Water back in September. RHB thinks this acquisition puts it in good stead to enter the industrial wastewater treatment sector. In addition, management has set a timeline to complete its Hong Kong dual listing by end-2Q17.

After that, RHB believes that SIIC's parent company, Shanghai Industrial, could inject its other water asset – a 45% stake in General Water of China – into SIIC