The process of environmental marketization accelerates trillions of cake and attracts capital competition.

Environmental industry has never been favored by capital like today. Recently, a joint road show of environmental enterprises and the 2016 (10th) Forum on Entrepreneurial Innovation of Environmental Industries attracted hundreds of investment institutions, including China Open Finance, Everbright Capital and CITIC Securities. With the publication of "Ten Atmospheric Articles", "Ten Water Articles" and "Ten Earth Articles", environmental industrial policies have been released continuously. Many market opportunities wait for capital exploration, and the environmental industry is also in urgent need of capital assistance.

Farmers are spraying foliage barrier agents in a farm in Wangcheng District of Changsha. In 2016, Yongqing's environmental protection area in Changsha Wangcheng area will be more than 200 thousand mu. In order to explore a replicable and extensible control model of heavy metal pollution in cultivated land, Hunan Agricultural Department carried out real-time follow-up and evaluation study on the restoration process and effect of each pilot project.

The sleepiness of development

In fact, the reason why the environmental industry was not favored by capital in the past has much to do with the vague industrial attributes and unclear positioning for a long time. Although the environmental industry has existed for a long time, due to the strong nature of municipal public welfare, the market is congenitally underdeveloped and the space for industrial development is not fully opened.

"No government can solve environmental problems, but it is far from enough to rely solely on the government." Fu Tao, chairman and chief partner of E20 Environmental Platform, said the government has been wavering in the marketization of municipal public utilities and environmental protection, creating a lot of uncertainty; capital is invested for certainty. The uncertainties in the industry have shaken the strategy, resources and capital allocation of enterprises, and seriously affected the industrial development.

"Environmental protection belongs to local authorities. In the case of unequal fiscal and taxation systems, the local government is basically powerless, it is impossible to do a good job in environmental protection without money. Fu Tao said that local governments or pollution enterprises did not take environmental protection seriously from the cost-effective point of view, resulting in the weakness of the environmental industry and the "pseudo industry" status quo.

In addition to the contradiction between public welfare and profitability, the inadequate capacity for sustainable development also seriously restricts the development of the industry. At present, the number of environmental enterprises in China is about 40 thousand to 5, and most of them are small businesses. This is because the early environmental enterprises are regional, through the specific relationship with local governments to obtain projects; this also makes the enterprise can not expand outside the region, development space is limited. The "small, scattered, chaotic" pattern of the environmental industry has affected the enterprises with technological and managerial advantages to become bigger and stronger, but also made the capital deterred.　　

"An enterprise depends on its relationship and develops with asymmetric information. It is impossible to get long-term recognition of capital. If there is no sustainable profitable business model, there will be no real environmental industry, and there will be no real docking with the capital market. Fu Tao, for example, said that many early real estate enterprises were the same, although there were more than one billion yuan of scale, but a project completed the company dissolved; there were more than 10,000 enterprises, now only a few dozen survived.

Dance of capital

With the increasing demand for environmental pollution control, and the construction of ecological civilization to the "five in one" height, the process of environmental industry marketization accelerated, trillions of yuan of market cake to attract capital competition. It is not only the Gezhouba Group, China Railway and other large-scale central enterprises began to cross-border layout of the environmental protection market, some from steel, coal and other areas of excess capacity to withdraw from the social capital has also focused on the environmental industry. The environmental industry has entered the capital age.

"The environmental industry has the characteristics of low income, low risk, long cycle and stable income. It was not favored by the capital market which likes to make quick money in the past, but now it has become a gold asset. For example, with 8% to 9% yields in tap water and sewage treatment and 20 to 30 years of long-term contracts, these BOT assets are now beginning to appreciate. Fu Tao said, how to face capital and use capital, most environmental enterprises need to make up this lesson.

According to incomplete statistics, there were hundreds of cases of environmental mergers and acquisitions in 2015, involving an amount of nearly 60 billion yuan. Among them, four companies, mainly owned by Enlightenment Technology Services Group of Tsinghua Holding Co., Ltd., acquired 29.8% of Sander Environment's shares in the transaction involving about 7 billion yuan, setting a record amount of mergers and acquisitions in the mainland's environmental market.

Capital intervention not only makes the environmental industry stand on the coveted "wind tunnel" and accelerates its development, but also makes the original environmental industry practitioners face the impact of cross-border capital "barbarians". Zhao Lijun, chairman of Botian Environmental Group Co., Ltd., believes that in the long run, large enterprises will intensify the competition and integration of the industry and accelerate the improvement of industrial concentration; if small enterprises do not have differentiated competitive advantages, it is difficult to change the dilemma.

The most obvious change is that the winning price of PPP projects has repeatedly "broken the bottom line", causing concern about vicious competition, making the industry panic. For example, the third-tier municipal solid waste incineration power generation projects frequently won low bidding prices, winning the bid within six months almost cut back; Jiangsu Gaoyou project recently hit a new low: 26.5 yuan / ton. Compared with many industry insiders, the conservative price is 60 yuan / ton to 80 yuan / ton.

Because most of the successful bidding enterprises are new capital in the field of environmental protection, it is difficult to investigate their technical strength, qualification and reputation; and most of these projects are long-term operation contracts for more than 10 years. It remains to be seen whether the operation effect will not reach the standard in the future, or whether they will bargain with the local government later, or even the contract is difficult to perform. Inspection. It can be seen that capital is also a double-edged sword.

Industrial change

In the past 20 years, China's environmental infrastructure has experienced a rapid development stage from scratch. Sewage treatment plants have developed from dozens to 45,000 now. The scale of waste disposal has increased tens of times and hundreds of times. With the large-scale construction gradually entering the end, the market gradually saturated, the industry overcapacity, oversupply of emerging phenomenon.

"Why is there low-cost competition in municipal sewage, urban water supply, garbage incineration and other fields? Because of the homogenization of environmental public services, users can not identify and distinguish the advantages and disadvantages of services, coupled with the low-cost impact of cross-border capital, industry change is forced." Fu Tao said that the environmental industry has gradually moved to the era of product and brand from the original engineering and project era.

In the era of product and brand, environmental industry can not be separated from capital "catalyst". Whether BOT or PPP, environmental enterprises need to have strong financial strength; listed financing is undoubtedly the best way to obtain low-cost funds. A number of outstanding environmental enterprises, such as Sander, Pioneer and Bishui, have achieved rapid development through listing.　　

With the opening up of the new three board market, more and more environmental enterprises have seen the dawn to the capital market. "Developing multi-level capital market is a national strategy. The so-called multi-level, including the main board market, including the new three board market. Wu Yu, chief analyst of new three board of Huatai Securities.

As an advisory service institution of environmental industry, E20 environment platform is also building a bridge between industry and capital. Xue Tao, executive director of the E20 Research Institute and vice president of the E20 Joint Research Institute of Peking University Environmental College, said: "We have 150 member enterprises, 14% listed on the motherboard, 9% listed abroad, 9% listed on the new third board, and 68% of the enterprises are not listed on the stock market, which requires the capital side and the fund to plan a way for them to open up the capital market."

"The environmental industry is highly policy oriented and the industry is very fragmented. In 2015, the company with more than 10 billion yuan in revenue, namely, North Water Control, reached 11.4 billion yuan; the first 7 billion yuan, Bishui 5.2 billion yuan. Huang Jian, head of PE investment at China Foreign Economic and Trade Trust Co., Ltd., believes that there is still much room for environmental industry to develop.