Summary of Investment

• Rapid growth in the scale of new sewage treatment;
• Multiple new PPP projects in the second half of the year, increasing reserves of projects;
• A valuation much lower than fellow companies, an adequate margin of safety;

Investment Advice

The share price of the company has been fully adjusted in the first half of the year. With the rapid growth of construction income in the second half of the year, it is expected to achieve the 30% growth in result for the whole year. The share price has the possibility of growth. We predict the net profit attributable to parent company from 2017 to 2018 to be RMB 453/570million. The rating of “buy” is given. The target price is HKD2.87. (Closing price as at 16 Oct 2017)