Business / Industries

China environment protection firms enjoy sunny outlook

(Xinhua) Updated: 2015-05-20 15:42

BEIJING - With stocks for Chinese listed environmental protection companies booming in recent months, the industry's future prospects look bright, analysts said.

Beijing Originwater Technology (BOW), a premier listed water treatment firm, witnessed its share price surging 74 percent from the start of this year to close at 59.15 yuan ($9.7) Tuesday, beating the upswing of 31.9 percent posted by the benchmark Shanghai Composite Index in the period.

BOW's performance pointed to investors' confidence in strong growth momentum of listed domestic air pollution, water and solid waste treatment companies, as big cities like Beijing face environmental pressure due to population and city expansions, said Sun Xiwei, a senior analyst with CITIC Securities.

Investors' enthusiasm has fueled rocketing valuations for many energy saving and environmental protection-related firms, with the average share price of 173 companies in this sector surging 63.9 percent as of Tuesday from the beginning of this year, Sun said.

Aquatic ecosystems and air quality have been severely damaged in many regions after decades of fast economic growth, threatening public health and sustainable economic development.

China has responded by releasing of a list of policies beneficial to environmental protection firms in hopes of spurring industry growth.

A four to five trillion yuan joint-investment from the government and the private sector is expected to be rolled out to fulfil goals outlined in a national plan to tackle water pollution, said Zheng Binghui, deputy director of Chinese Research Academy of Environmental Sciences.

The State Council, China's cabinet, in mid-April unveiled a detailed action plan to fight water pollution, saying more than 70 percent of the water in the seven major river valleys, including the Yangtze and Yellow rivers, should be in good condition by 2020.

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