AnXueSong 2016AGMCEO An Xue Song addressing shareholders queries at China Everbright Water's 2016 AGM. Photo by Sim Kih

agm logoTime & date: 9.30am, 25 April 2016

Venue: Pan Pacific Singapore


Wang Tianyi 25 April 2016

“More and more people, both in China and globally, are concerned about having clean water and air. The Chinese government is very supportive of the environmental protection sector.

“China’s economic growth has slowed down but the environmental protection sector remains robust. We are very confident of the Group’s bright future.”

– Executive Chairman Wang Tianyi
   Photo by Sim Kih

CHINA Everbright Water Executive Chairman Wang Tianyi indicated that the Group will be in a stronger position than before to secure more Public Private Partnership (PPP) projects such as its recent billion-yuan deal with the Zhenjiang sponge city.

At the Group’s AGM on Monday, he revealed that China’s newly-launched PPP think-tank has extended an invitation to him to co-direct the institute of scientific research for PPP, which will also provide policy consulting services and professional training.

Well-known in academic and government administration circles, Dr Wang was formerly the President of Shandong Academy of Science.

He was also formerly the Deputy Mayor of Jinan (provincial capital of Shandong) as well as the former dean of the Economic Management faculty of Yantai University in Shandong.

Dr Wang is currently China’s Chief Representative at the PPP Center of United Nations Economic Commission for Europe (UNECE), which held an international forum in Geneva in March 2016. Twelve nations gave presentations on PPP case studies, and China was represented by China Everbright Water.

The presentation was so successful that it prompted the PRC government to set up a national think-tank for PPP. Launched last Friday by Tsinghua University, the think-tank is sponsored by top PRC planning authority National Development and Reform Commission, as well as by China Insurance Regulatory Commission.

“The invitation shows the strong relationship that we have with the central government as well as with the local municipal government,” he said.

♦ Q&A session with CEO An Xue Song

Background: On 18 March, the Group secured a project to transform Zhenjiang in Jiangsu Province into a “sponge city” with infrastructure to absorb, store and recycle rainwater. The project involves the construction, maintenance and operation of grass channels, rain gardens, sunken green spaces, urban storm water drainage pipes, pump stations and waste water treatment plants. The PPP portion is valued at Rmb 1.385 billion and the Group has a 70% interest in this. The non-PPP portion is valued at Rmb 1.2 billion and the Group is the project manager for this.

AnXueSong 25 April 2016

“Last year was marked by rapid growth and significant reduction in operating cost.”

– CEO An Xue Song
   Photo by Sim Kih

Q: When will the sponge city project begin to contribute to the Group's bottom line?

We will start recognizing construction revenue and profit this year. Our contract includes 23 years of operating service fees upon completion of the facility.

Q: How will you finance the construction of the sponge city project?

We need to raise another Rmb 900 million and have negotiated with local banks for this. As the water treatment sector is viewed favourably by the banks, they are happy to extend to us the loan amount that we need.

Q: Do you have any cap on your gearing level?

We believe that a healthy gross gearing level is 60% to 70%. We are also looking into setting up a water infrastructure development fund.

Q: How will the slowing PRC economic growth and rising interest rate environment affect the Group? What is your strategy in response to this?

The Chinese government is supportive of the water treatment industry. This is evidenced by the 10 water treatment guidelines issued in 2015 and the 13th five-year plan announced this year. The interest rate in China has come down from 6% to 4%. We will strike a balance between using domestic and offshore fund raising avenues.

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