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"Memstar products are comparable to Japanese products and yet they are cost-effective," said United Envirotech CEO, Dr Lin Yucheng (left). With him is Memstar CEO, Dr Ge Hailin.
Photo by Sim Kih

TRADE SHOWS are a great place to meet customers, suppliers, business partners and keep oneself abreast of the latest industry developments and trends.  Last but not least, it is also a place to size up the competition.

I visited the Singapore International Water Week, and spoke with two SGX-listed market leaders for water treatment using membrane technology: Memstar and United Envirotech.

“Trade shows are good for branding building,” said Ms Pan Shuhong, the executive chairwoman of Memstar, a leading manufacturer of membrane products used in water treatment plants.

Memstar is also a founding sponsor of Singapore International Water Week, which showcases more than 650 companies and organizations from around the world.

The focus of the Water Week was the emerging global industrial water sector. United Envirotech happens to be a market leader in designing and building plants for wastewater treatment using membrane technology.

It designed and built Singapore's largest industrial wastewater treatment plant for SembCorp.

The industrial water and wastewater equipment market is expected to grow at 7.5% a year over the next five years to reach a total value of S$22 billion in 2016. Demand for equipment is expected to grow fastest in the oil and gas sector, at an annual rate of over 24% (Global Water Intelligence forecast).

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"We have an extensive track record of successful membrane applications in municipal wastewater treatment, drinking water treatment and industrial water treatment," said Ms Pan Shuhong, executive chairwoman of Memstar. Photo by El Lee.

Organized by Singapore’s Ministry of the Environment and Water Resources in our nation’s bid to be a global water hub, Singapore International Water Week was into its 5th year and was held from 1 to 5 July at the Sands Expo & Convention Center, Marina Bay Sands.

Over 13,000 delegates from about 100 countries viewed the gamut of cutting edge technology that showcased practical and sustainable water solutions.

Venture capitalists, angel investors, private equity fund managers and institutional investors with industry representatives also got to check out start-ups and technology inventors for possible technology commercialization opportunities at its TechXchange Workshop.


A place for engaging business partners

"Customers appreciate the trade show because it maximizes their valuable time by providing a one-stop platform. Here, they can engage potential business partners and view the latest solutions that technology has to offer for the management of water scarcity,” explained Ms Pan.

Some customers, especially those in the civil service, are not as technically savvy as suppliers in the commercial sector, and Memstar has done its part in raising the understanding of membrane applications among governments and corporations in China, the Middle East and Singapore.

Memstar's long time customer, Dr Lin Yucheng, CEO of SGX-listed United Envirotech, was at the trade show.  His deputy CEO, Mr Lee Li, was also present.

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"We change wastewater that destroys bio-life into something that is safe for bio-life," said Mr Lee Li. Photo by Sim Kih

"Industrial wastewater is much more difficult to treat compared to municipal waste because of the complexity of its highly toxic chemical content.  For example, pesticides are designed to destroy life," explained Mr Lee.


Endorsement from top membrane player

"We have used Japanese products, but found them overly costly. We have used Chinese products, but found the quality unreliable. Few manufacturers can produce quality membrane products at a reasonable price. Many water treatment players are using Memstar as an OEM supplier because they provide very good value for money," said Dr Lin.

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"Memstar has done a lot in membrane research and development in the past 7 years to improve the reliability, pricing and competitiveness of our products. This has helped us secure more and more international customers. Our strong links with China also helped," said Dr Ge Hailin. Photo by Sim Kih

"We hope all membrane technology players can work together to develop the industry," said Memstar CEO, Dr Ge Hailin.

If every player does well, the industry market pie will grow bigger for everyone.

Dr Ge had a suggestion for the trade show organisers: China's increasing importance in the global economy makes it an important market for any water hub and he looks forward to seeing more Chinese state-owned consultancy firms at the trade show.

Currently, there is a lack of presence from the Chinese consultancy firms that design the technical specifications used by industrial and municipal players in China's water industry.

These firms are highly influential because the nation has yet to license international water players and it would certainly be exciting to have a platform for presenting one’s innovations to the folks who decide which standards would be used across China's huge market, he said.


Related story: MEMSTAR: Another Target For Private Equity Investors?

More photos of the trade show by Sim Kih.

 

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Dr Ge and Ms Pan at the Memstar booth at Singapore International Water Week 2012.

 

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Memstar has been a founding sponsor of Singapore International Water Week for the past 5 years.
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Memstar products on display at Singapore International Water Week.



 

 


Comments  

0 #21 luckystrike 2012-08-03 11:14
I would go with memstar as it is not dependant on so much capital but more of knowledge.

china would not support hyflux as it is malaysian ceo and sg company but memstart got higher chance.

Seems silly but china is a communist country and may go to war with neigbours and they need to know their water supply is intact.
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0 #20 7838 2012-07-19 08:12
whatever or whoever the market leaders or not, survivor of the fittest will say all in this real world. Despite Hyflux being the pioneer company to list in SGX for waste-water treatment technology using membrane (with NEWATER), if it does not perform, "bye bye" to all past accreditations. Sad to say so...
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0 #19 C.C. Low 2012-07-13 08:32
BC

Membrane technology is the future way to go as it is cost effective vis-a-vis filtration and evaporator systems which are high in energy consumption.

Actually, if you have extra cash in hand, Ezra Holdings offers very good potential in capital appreciation. It is now trading at a 3-year low of around 1.09. The oil & gas industry is breathing life and is on the rebound, which makes this counter very attractive in terms of price. This is also a counter very much favoured by the fund managers.
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0 #18 BC 2012-07-13 00:51
Thank you. C.C.

I Have a bit doubt on hyflux on whether they can manage the big project. Recently they raise a few times of money by issuing new share or bonds. And margin was low, and they developed so fast, fundamentally they were a membrane company only. To me, hyflux was not yet proved., I would prefer Semb Ind, at least their track record was good, and utility part was growing.
United enviro profit lower this year was due to higher financial cost from convertible bonds.managemen t already invest a few waste water plant with these money. profit will be 3acts++/share for the next few years. And only can be better.
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0 #17 C.C. Low 2012-07-12 10:50
BC

Sorry, dividend for Hyflux for 2011 should read as 0.0102 Sorry for the typo error.
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0 #16 C.C. Low 2012-07-12 10:47
BC

Maybe the following statistics can help you in your decision making process if you are looking at investing in this industry :

a) Hyflux 3 year High $3.40 (Jun '10) Low $1.03 (Dec '11) Dividend '12 = 0.021 (yield = 0.0142) Dividend '11 = 0.0069 (yield = 0.0069). Upside potential based on current price $1.475 = 230 %

b) United Envirotech 3 year High $0.515 (Sep '10) Low $0.29 (Aug '11) Dividend '11 0.003 (yield = 0.0092) Dividend for '12 not declared yet but probably same as in '11. Upside potential based on current price $0.325 = 167 %

c) Memstar 3 year High 0.09 (Aug '10) Low 0.055 (jun '10) Dividend 0.0004 (yield = 0.0061). Upside potential based on current price $0.065 = 138 %.

Based on the above statistics it is quite obvious that Hyflux offers the best option available bearing in mind that it has an order book of about S$1.8bn currently at hand.

I have not yet invested in this counter as I am currently already deeply vested in other counters.
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0 #15 BC 2012-07-12 03:13
If only choose 1 from water treament? which one will you pick?
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0 #14 BC 2012-07-12 02:54
United envirotech recently buy & build a few waste water plant and this will make their income more stable and easy to forecast. Base on annual report, only know that they will get a minimum charge even capacity is not effective used. as I am very interested in this line, anybody know which can be the catalyst for this kind of business. As for Memestar, its model is simple, manufaturing, the order from United envirotech should be enough for the coming years, but lack of imagination to speculate.Sound globla is a big company also, but the convertable bonds lack transparent and make valuation difficult. Hope can get some knowledge from this forum.
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0 #13 Sue 2012-07-10 18:06
What!? There are so many experts here on the water industry? I am pleasantly amazed. If anyone of you would recommend a stock pick, I would be most happy to consider it, knowing that it comes from 'experts' Thank you!
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0 #12 Whats up 2012-07-10 09:13
On the subject of Hyflux, please allow me to address a misconception regarding this company. Although it is well known for its desalination water works using membrane technology, the company actually engages in full fledged water treatment operations, i.e. it is offering membrane technology for desalination, water purification, and also wastewater treatment, across S.E.Asia, China, India, the Middle East, etc.

For the benefit of our readers, contrary to the impression inferred from the comment by "shARK" above, Hyflux is also deep into wastewater treatment. It has a contract with Zunyi City (Guizhou Province, China) for the building and operation of a wastewater treatment plant with a 150,000 cubic metre capacity to be operated over a 30 year period. I believe this plant alone already surpasses the capacity of United Envirotech's plant in Guangzhou which has only 100,000 c.m. as pointed out by "shARK". Also it has several other wastewater treatment plants elsewhere in other parts of China, although these are of smaller capacity, such as the Changshu plant (in Jiangsu) with 30,000 c.m. capacity; the Langfang plant (Hebei) 80,000 c.m.; Liaoyang plant (Liaoning) 30,000 c.m.; and the Mingguang plant (Tianjin) 30,000 c.m. As you can see, it is not just doing desalination water works alone.
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