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Public company info - CT Environmental Group Ltd. , 01363.HK
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CT Environmental Group Ltd., 01363.HK - Company Profile
Chairman Lam Wai Tong(Acting Chairman)
Share Issued (share) 6,317,000,000
Par Currency Hong Kong Dollar
Par Value 0.025
Industry Water Supply
Corporate Profile Business Summary: The Group is principally engaged in the construction of wastewater treatment plants, wastewater treatment plant operation services, supply of industrial water, provision of heating services and provision of sludge and solid waste treatment services. Performance for the year: The revenue of the Group decreased by approximately 26.2% to approximately HKD850.4 million for the year ended 31 December 2019 from approximately HKD1,153.0 million for the year ended 31 December 2018. The loss attributable to owners of the Company was approximately HKD316.7 million for the year ended 31 December 2019 (2018: approximately 3,872.8 million). Business Review: In 2019, although the Group’s overall operating performance has been improved compared with that of 2018, the Group continued to suffer from certain setbacks as a consequence of the various unfavourable incidents happened in 2018. The project portfolio of the Group was the same as those compared with 2018 without any new projects added since the Group believed that 2019 should be a prudent year after the 2018 crisis. The Group should carefully and respectfully handle the relationships with all its stakeholders so as to pave the way for future recovery. In 2018, the PRC government commenced a series of nationwide actions in tightening the environmental enforcement efforts and accountability by carrying out a centralised inspection of environmental protection (中央環保督察) which severely affected a number of subsidiaries during 2018. The Group has since then paid most of the required penalties and has performed relevant rectification works for some of the treatment facilities. However, the negative impacts continued to affect 2019 operation results including the termination of sludge treatment services for some of the Group’s subsidiaries, reduction in demand for the Group’s wastewater treatment services, lost of revenue during the period of rectification works and some of the alleged environmental pollution related acts has been subsequently translated into litigations in committing offences. Notwithstanding the unfavourable situation as mentioned above, the hazardous waste treatment segment did show a remarkable recovery and become the earliest segment to bounce back. This was consistent with the Group’s expectation due to the increasing focus on hazardous waste by local governments. In 2019, the cashflow position of the Group continued to face serious challenges. In order to cope with this, the Group continued to dispose certain subsidiaries including the remaining 50% of the Group’s Group’s equity stake in the project holding company with business in the Guangxi Autonomous Region at an effective consideration of RMB620,000,000 and also effectively reduce its equity stake of a subsidiary with business in the Zhongshan City, Guangdong Province, from 100% to 51% at a consideration of RMB98,000,000 in the form of equity and shareholder’s loan. Most of the proceeds from the above disposals were used to repay bank loans. At the same time, the Group continued to adopt cost savings measures while continued its plan to dispose of other non-core subsidiaries and assets from terminated facilities. Another challenge on cash position in 2019 were the commencement of the legal actions against the group companies for debt recovery. Some of the judgments of the above legal actions has been issued so that the Group is now facing risk of judgment enforcement by the relevant creditors. The Group is continuing its effort in arriving settlement plans with its creditors. The Company’s trading of shares has been suspended since 1 April 2019 due to the failure to publish the annual results for the year ended 31 December 2018. The Stock Exchange of Hong Kong Limited (“Stock Exchange”) has subsequently issued certain resumption guidance to the Company, including the publication of the outstanding financial results of the Group. The Group will continue its utmost effort in satisfying the resumption guidance and target to resume trading as soon as practicable. The trading suspension itself did not affect the business operations of the Group. Prospects: The Group’s early presence in the general solid waste sector and the hazardous treatment waste sector provided the Group with advantages in these market segments. As reflected from the 2019 results, the revenue from hazardous waste treatment segment was the first segment to recover. In recent years, the Chinese government has expressed its concern over the potential harmful effect of hazardous waste and also the concern over the rate of reuse and recycle of general solid waste so as to promote efficiency in resources utilization. In general, there are entry barriers to the solid waste treatment sector and the hazardous treatment sector in terms of obtaining operating permits or licenses and in terms of capital expenditure. Hence, the Group believed that the operating permits or licenses which the Group possesses can enhance the future revenue base of the Group. In view of the Group’s cashflow position, the Group is in the process of disposing non-core assets or projects so as to further relieve the Group from cashflow pressure. The Group has signed an agreement with a local government in land resumption for a cash compensation of approximately RMB1.24 billion on 28 September 2020. The Group expected there will be similar transactions so that more cash inflow from disposal is expected. In view of this, the Group is confident to successfully pass through such a difficult moment.

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