Credit Suisse maintains 'outperform' rating on SIIC, target price of 26 cents 


TrinaChen2.15Credit Suisse analyst:
 Trina Chen (left)

• SIIC holds total WWT/WS capacity of 5.5 mn t/day (or 4.8 mnt/day if excluding equity capacity of Longjiang in our estimate), versus 4.1 mn t/day a year ago – suggesting nearly 0.7 mn t/d addition for the year, with half of the projects secured towards year end. 

• With a potential stronger growth profile, we view that its valuation is more attractive vs peers. Maintain OUTPERFORM.  


SIIC stated that it holds a portfolio of about 70 water treatment and supply projects (including Longjiang) with total design capacity of about 5.5 mn t/day (or 4.8 mn t/day if excluding equity capacity of Longjiang in our estimate), versus 4.1 mnt/day) a year ago - driven by Yinchuan (0.20 mnt/d-new BOT project), Hanxi (0.20 mnt/d-expansion and upgrade), Qingpu (0.12 mnt/d-acquisition), Dongguan (0.11 mnt/d-acquisition) and Dalian (0.04 mnt/d-new BOT project), in our estimates.

The capacity addition has met management's FY acquisition target mostly in our view, with nearly half taking place towards end of the year.

We also note that the capacity disclosed only includes "current capacity", not long-term capacity – a more conservative approach than peers.  

CS_SIIC2.15 

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