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Encountering the "cold winter" of capital, the environmental protection industry seeks to break through the difficulties

recently, at the "2018 China Environmental Industry Summit Forum" held by the environmental chamber of Commerce of the all China Federation of industry and commerce, the first dialogue theme originally arranged was "the heavy responsibility and responsibility of the industry - winning the battle of pollution prevention and control". However, the guests of the dialogue "deflected" the topic, directly talking about the financing difficulties and debt defaults encountered by environmental protection enterprises, It immediately resonated, and the discussion theme of the whole sub forum also turned to the financing difficulties of environmental protection enterprises

although the environmental protection market is booming, environmental protection enterprises are currently facing multiple difficulties: they are not only facing the important task of winning the battle of pollution prevention and control, but also facing the dilemma of repeated coldness in the capital market; Both the favorable development opportunities brought by the "the Belt and Road" and the confusion caused by the adjustment of PPP projects; It is not only facing the favorable opportunity of the upsurge of environmental protection enthusiasm of the whole society, but also facing the dilemma of the country entering the industry and the people retreating

"we have always controlled the debt ratio at a controllable level of 60%. Under the background of the country's vigorous deleveraging and increased financing difficulties, although a large number of environmental protection projects have been released by the government, we will not easily touch PPP projects, and this is also the idea for the next stage." Zhang Genhua, President of Beijing fresh environment Technology Co., Ltd., said in an interview with China Economic Herald after the meeting: "the market is really good now. We have given up many BOT projects. It's a pity, but due to capital constraints, we can only choose the best among the best."

compared with the fresh environment, Beijing Oriental garden environment Co., Ltd., which once dominated the PPP market, has encountered a crisis that has never been seen before

on January 15 this year, Ganfeng lithium has a certain advantage day. Among the top 15 winners of PPP projects in 2017 published by the agency, Oriental Garden ranked 12th with a cumulative bid winning amount of 102.2 billion yuan, second among private enterprises, and the only private enterprise with a bid winning amount of more than 100 billion yuan

however, on May 20, Oriental Garden planned to issue bonds of 1billion yuan, but the market voted with its feet, and finally only received a financing amount of 50million yuan, resulting in a 19.58% decline in the stock price in the next four trading days and a floating loss of 9.8 billion yuan in the market value. As a leading enterprise in environmental protection, the failure to issue bonds has given the market an obvious signal that it is not optimistic about this industry. In the next few months, many environmental protection enterprises such as Shenwu environmental protection and Shengyun environmental protection directly defaulted on their debts

Wen Yibo, chairman of sound group, said: "most of the environmental PPP projects are still under construction. Now the problem is that there is no way to finance. The concept of environmental protection was very hot in the past, and now some financial institutions hide when they see environmental protection projects.

Zhang Genhua told China Economic Herald: "We are not unwilling to do PPP projects. Previously, there was a dispute within us about whether to do PPP projects. Later, we decided not to do PPP projects. After all, PPP projects are too large in scale and have too strong leverage. Oneortwo projects will directly affect the overall income, and the income is seriously lagging behind."

he said that some local governments released a large number of PPP projects, some of which were often billions of yuan, and some of which simply exceeded the local financial payment. "These local governments have no plans for sustainable payment capacity. For some central enterprises, it is possible to accept these projects, and our private enterprises will be more cautious. While BOT projects are small, we are more willing to do it."

Wen Yibo believes that in recent years, the scope and volume of environmental PPP projects have expanded, and more and more funds are needed. However, the project does not match financing, and the financing system has not been established

Zhang Genhua told China Economic Herald that the financing cost of environmental protection enterprises has increased significantly since last year. Last year, the on balance sheet financing cost was close to 6% and exceeded 6% in the first half of this year. Since July, he learned from some banks that the starting point of financing cost is 7.5%. At present, it is very good to control the financing cost at about 8%. He also said that the financing cost of government green bonds and green loans is low, some of which are only 3%. Although such support has been enjoyed before, it is not very sufficient for private enterprises

how to break through the difficulties

"the environmental protection industry is the main force of environmental governance and ecological protection, and it is also a major opportunity to fight the tough battle of pollution prevention and control." However, Huang Runqiu reminded that enterprises without core technology cannot go far or long, and buying technology is not a long-term strategy. The development of environmental protection industry fully illustrates the importance of technological innovation. For example, China's coal-fired power plants experienced three flue gas treatment technology upgrades in 1997, 2003 and 2011, and the emission standards were significantly improved. Especially after the large-scale ultra-low emission transformation in 2016, the major pollutants such as soot, sulfur dioxide and nitrogen oxides were significantly reduced, only 5%, 2.9% and 4.5% before 1997

Huang Runqiu said that many technical problems will be encountered in the battle of pollution prevention and control, which requires the industry to take the initiative in research and development and do a good job in integrated innovation. "Entrepreneurs should have a strategic vision to promote technological progress, but unfortunately, there are not many enterprises with this vision, and realism is still common."

zhaolijun, President of the environmental chamber of Commerce of the all China Federation of industry and Commerce and chairman of poten environment group, said in an interview with China Economic Herald that the important thing in choosing PPP projects is the quality of the projects, and then associate with the strong. Through the cooperation with the central enterprises with abundant capital, they jointly won the environmental protection PPP project, created value in providing technical solutions for governance, and leveraged several times the environmental protection governance market through a small amount of investment capital

"in fact, the central enterprises have the most advantage of PPP. They have strong financing ability and low financing cost. The key is that these PPP projects are engineering quality. Central enterprises have the advantage of engineering quality. Some environmental enterprises are coerced into PPP competition because they have no advantage." Zhao Lijun said that at that time, he envied those companies that had won a lot of PPP projects. Now when he looks back, he is surprised to break out in a cold sweat. Enterprises that have won many PPP projects in the early stage now face relatively large financing problems, and this situation will not change in the short term

Zhao Lijun also believes that it is estimated that these enterprise projects or enterprises will eventually be large central or state-owned enterprises. One way is to sell project assets, and the other way is to directly sell enterprise shares. Several large listed environmental protection companies have been negotiating relevant matters with central enterprises to seek solutions

Zhang Genhua introduced his experience in enterprise development. He said that the clean environment takes technological innovation as the driving force for enterprises to win, focuses on building core technologies, uses advanced equipment production, and strives to be better in quality. In addition, the business model is also transformed and upgraded. Driven by the market environment and policies, it is transformed from the traditional general contracting to the BOT (franchise) business model, so as to improve the service capacity of environmental governance

after nearly 10 years of development and accumulation, the franchise business of fresh environment accounts for half of the whole business of the company. BOT mode is the main development direction of the company. Zhang Genhua said that the transformation of this operation mode will benefit the growth of the company's performance and sustainable development in the future. At the same time, fresh environment laid the foundation for the company to lay out the petrochemical non electric flue gas treatment market through the acquisition of 80% equity of bohuitong, and its business scope also expanded from flue gas treatment to electric power wastewater treatment

Zhang Genhua stressed that China's environmental protection industry is inseparable from innovation, and technological innovation is an important guarantee for the development of the entire industry. Fresh environment has experienced more than ten years of development since its inception, and has been constantly innovated in technology. From the initial vortex coupling technology to the tube bundle dust removal technology in recent years, the successful research and development of these new technologies provide better options for optimizing ultra-low emissions, and make the perfect combination of energy conservation and emission reduction

Zhao Lijun said, "through horizontal mergers and acquisitions to expand the scale and vertical integration to improve efficiency and efficiency, many large companies in the environmental protection industry are likely to become the object of mergers and acquisitions, and their central enterprises and state-owned enterprises will play an important role in capital, which may take six months to a year." In the future, the development trend of the environmental protection industry will move from the past end treatment to new scenarios such as green manufacturing, green consumption, cleaner production and resource recycling, from end treatment to the front end of production, from "visible" pollution to "invisible" pollution. The future industrial development, from "environmental protection" to "environment" is an inevitable trend. The industry needs to make further value extension to serve the needs of industrial upgrading and the enrichment of ecological products

in the dialogue of "looking for environmental enterprises' unicorns' - focusing on business models and technological innovation" at the forum, it was learned that this year, the CSRC, Shanghai and Shenzhen stock exchanges and other departments frequently shouted in support of the "four new economies", and said that they would open an IPO green channel for "unicorns" in four major industries, including ecological and environmental protection. In addition, the official implementation of the new deal of "new third board +h shares" will have a clustering effect on the illiquid new third board enterprises, which will have a relatively high premium in terms of activity, trading volume, transaction price, etc. Small and medium-sized environmental protection enterprises have strong technical advantages and R & D capabilities in the segmented fields. They should be good at seizing potential opportunities, developing new business forms, finding a path of breakthrough development, and laying out places that are difficult for large enterprises to reach

in the dialogue of "the road of environmental enterprise reform - 'fusion' expansion", participating enterprises shared their own growth experience. After more than ten years of experience and development, the large environmental protection leading enterprises represented by Beikong water and tus sound choose to take the "fusion" development as the main feature, and cooperate with specialized small and medium-sized environmental protection enterprises to establish an aircraft carrier battle group through asset restructuring, mergers and acquisitions, brand extension, strategic alliance, cultural introduction and other cooperation methods, so as to jointly face the changing market demand. With the fusion and expansion of the enterprise ecosystem, it has constantly updated and expanded its own capabilities, gathered more complementary participants, and is also changing the existing industry form and pattern to effectively combat market risks

in the dialogue on "the road of environmental enterprise reform - 'fission' transformation", the participating enterprises believed that fission means a kind of business innovation and the emergence of a new business opportunity. Mature large enterprises are spontaneously splitting and seeking new business growth points. This is the stage of enterprise development and the law of business. For example, poten environment adheres to the "layout of environmental industries related to water industry", and continues to expand in the subdivisions of industrial water system, urban water environment, ecological restoration and environmental art creation, soil and groundwater remediation, monitoring and detection and smart environment, core equipment manufacturing and other fields, in pursuit of new value creation. Through continuous mergers and acquisitions at home and abroad, ba'an water has comprehensively cut into the fields of municipal water supply and drainage, seawater desalination, sludge disposal and so on. The enterprise itself starts fission innovation and cross-border integration from the core, and the advantageous genes can be completely copied and transmitted

prevent financial risks from three aspects

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