Green Build Technology is a pioneer in China's recent move to upgrade old buildings to become energy efficient. Picture of Hebai Estate from Company website
FOLLOWING THE run-up of waste water treatment stock prices over the past year or two, some investors have turned to building energy conservation as the next investment theme.
One stock that is catching investor attention is Green Build Technology, which revamps old buildings to make them compliant with energy efficiency regulations.
Its stock price has multiplied several times over the past year.
Green Build Technology's stock price has increased from 3 cents on 6 June 2014 to about 40 cents currently. Bloomberg data
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Mr Zhao is a well-known entrepreneur in China's energy saving industry, with numerous patents to his name. |
Energy conservation is a big thing in China. In 2013, the country introduced a policy that required new buildings to be 65% more energy efficient compared to buildings built in prior years.
The Group went into the energy conservation business last year when it acquired Harbin Shengming Energy Saving Technology Co Ltd.
Harbin, the eighth most populous PRC city and the most populous city in Northeast China, is also known as ice city, famed for its long and bitter winters.
During winter, coal is commonly burnt for household heating, causing heavy air pollution.
In October 2013, the city hit the news for record levels of smog, so much so that all the highways in the Heilongjiang province were closed.
In February 2014, Harbin Shengming Energy Saving Technology was commissioned by a government task force to improve the environmental friendliness of PRC buildings.
After the Group acquired Harbin Shengming Energy Saving Technology for a nominal sum of S$1 in June 2014, its stock price went on a run.
It is currently trading at about 40 cents, compared to 10 cents or less before the acquisition.
CEO Wu Xueying owns 3.5% of the Group. Photo by Sim KihIn a pilot town planning EPC project, the Group reduced the need for coal heating for a residential estate of 1,850 households at Hebai, Harbin by revamping the heating system and improving building insulation.
It has proprietary technology for outdoor wall cladding and insulation, as well as technology for insulating windows and doors.
The Group receives grants of about Rmb 160 per square meter of built-up area.
Its pilot project at Hebai estate covered 160,000 square meters, a tiny fraction of an estimated 50 billion sq m of old buildings that require upgrading nationwide.
It currently has an order book of about 5.3 million square meters of built-up area, translating into revenue contribution of Rmb 825 million over the next 2 to 3 years.
The Group generated revenue of Rmb 289.7 million in FY2014.
The energy conservation business generated segment profit of Rmb 30.9 million in FY2014, compared with Rmb 5.6 million from its packaging business (after eliminating minority interest).
