OREANDA-NEWS. Industrialisation and economic modernisation has fuelled the expansion of environmental services across the region. Revenue associated with waste and environment services & equipment can be generated by environmental engineering and consulting, pollution control equipment manufacturing and waste management. According to Bloomberg, there are 15 listed stocks traded on Singapore Exchange (SGX) that reported more than half of their revenue to either of these three activities in the last financial year.

Among these 15 stocks, there are nine of them which report all of their revenue to either of the three activities mentioned above. They are namely Hyflux, 800 Super Holdings, China Environment, ecoWise Holdings, Advanced Holdings, Memstar Technology, Leader Environmental Technologies, Colex Holdings and Metech International. They have a combined market capitalisation of S\$1.0 billion and averaged 2014 year-to-date total return of 6.7%. The remaining six partial plays have a combined market capitalisation of S\$2.4 billion and averaged 2014 year-to-date total return of 7.0%.

The three largest capitalised stocks are United Envirotech, Keppel Infrastructure Trust and Hyflux. They have a combined market capitalisation of S\$2.8 billion and averaged 2014 year-to-date total return of 17.2%. The table below details the 15 relevant stocks sorted according to market capitalisation.

Name SGX Code Market Cap: S\$M Total Return YTD % Px Chg Pct YTD % Waste & Environment Services & Equipment Revenue % GICS SubInd Name
UNITED ENVIROTECH U19 1551.0 77.2 76.8 69.1 Environmental & Facilities Services
KEPPEL INFRASTRUCTURE TRUST LH4U 670.7 9.9 1.9 76.8 Environmental & Facilities Services
HYFLUX 600 616.8 -35.5 -36.8 100.0 Water Utilities
CHINA ENVIRONMENT 5OU 100.0 -77.8 -77.8 100.0 Industrial Machinery
800 SUPER HOLDINGS 5TG 84.0 115.5 111.4 100.0 Environmental & Facilities Services
CHINA ENVIRONMENTAL RESOURCE RS1 66.0 25.0 25.0 90.4 Fertilizers & Agricultural Chemicals
ECOWISE HOLDINGS 5CT 65.0 0.8 0.0 100.0 Environmental & Facilities Services
ADVANCED HOLDINGS 5IA 58.1 -23.5 -25.2 100.0 Oil & Gas Equipment & Services
UNION STEEL HOLDINGS V69 47.6 15.9 13.6 66.1 Environmental & Facilities Services
MEMSTAR TECHNOLOGY 5MS 40.0 105.9 -15.4 100.0 Commodity Chemicals
LEADER ENVIRONMENTAL TECHNOL LS9 38.6 -8.7 -8.7 100.0 Environmental & Facilities Services
COLEX HOLDINGS 567 36.4 52.8 48.6 100.0 Environmental & Facilities Services
ADVANCE SCT 5FH 27.1 -60.0 -60.0 59.0 Diversified Metals & Mining
MOYA HOLDINGS ASIA 5WE 27.0 -26.2 -26.2 98.6 Industrial Machinery
METECH INTERNATIONAL QG1 21.1 -69.6 -69.6 100.0 Environmental & Facilities Services

Source: Bloomberg (Data as of 16 December 2014)

United Envirotech

United Envirotech provides environmental engineering services primarily in the People’s Republic of China and Malaysia. It operates through two segments, Engineering and Treatment. On 11 November 2014, the company reported net profit for the quarter ended 30 September 2014, increased 144.9% year-on-year, to S\$18.0 million. United Envirotech has a market capitalisation of S\$1.5 billion which is the largest among the 15 stocks and generated 2014 year-to-date total return of 77.2%. The stock went ex-dividend on 7 August 2014, distributing S\$0.003 per share in dividends.

Keppel Infrastructure Trust

Keppel Infrastructure Trust (KIT) is a business trust that invest in energy and environmental infrastructure assets. KIT’s Sponsor, Keppel Infrastructure, is a wholly-owned subsidiary of Keppel Corporation. KIT has a mandate to invest in Singapore and globally, with a focus on Europe and Asia Pacific. On 16 October 2014, the company reported that revenue for the quarter ended 30 September 2014, decreased 5.7% year-on-year, to S\$16.1 million. KIT has a market capitalisation of S\$670.7 million and generated 2014 year-to-date total return of 9.9%. The stock went ex-dividend on 25 July 2014, distributing S\$0.0313 per share in dividends.

Hyflux

Hyflux provides integrated water management and environmental solutions worldwide. It operates in two segments, Municipal and Industrial. It has operations and projects in Singapore, Southeast Asia, China, India, Algeria, the Middle East, and North Africa. On 5 November 2014, the company reported profit after tax and minority interests (PATMI) for the quarter ended 30 September 2014, at S\$11.3 million. Hyflux has a market capitalisation of S\$616.8 million and generated 2014 year-to-date total return of -35.5%. The stock went ex-dividend on 14 August 2014, distributing S\$0.007 per share in dividends.

China Environment

China Environment provides industrial waste gas treatment systems in the People’s Republic of China. The company is involved in designing, assembling, installing, testing, and commissioning various equipments related to industrial waste gas treatment and management systems. On 11 November 2014, the company reported revenue for the nine months ended 30 September 2014, increased 52.9% year-on-year, from RMB\$344.6 million to RMB\$526.8 million. China Environment has a market capitalisation of S\$100.0 million and generated 2014 year-to-date total return of -77.8%.

800 Super Holdings

800 Super Holdings provides environmental services for public and private sectors in Singapore. The company offers waste management services, including residential, commercial, and industrial waste collection, as well as recycling services. On 26 August 2014, the company reported net profit for the financial year ended 30 June 2014, increased 57.1% year-on-year, to S\$9.1 million. 800 Super Holdings has a market capitalisation of S\$84.0 million and generated 2014 year-to-date total return of 115.5%. The stock went ex-dividend on 3 November 2014, distributing S\$0.01 per share in dividends.