SIIC Environment's recent acquisition will boost profit by 9%

Net gearing will also rise to over 50%, analyst said.

SIIC Environment announced that through its two subsidiaries it will increase its shareholding in Lonjiang subsidiary from 25% to 58%. After the deal worth RMB836m (US$124m), Longjiang will become a subsidiary of SIIC.

Jefferies believes that the deal should increase the company's 2016 net profits (NP) by about 9% and net gearing by 8pts to just above 50%.

"Net profits attributable to the assets acquired or disposed of, compared with FY15 net profits is 10.07% according to the announcement. Based on our estimate, the deal should increase FY16 NP by about 9%," it said in a report.

Longjiang holds 41 projects relating to the water treatment and supply design capacity of 3.55 million tons/day and sludge handling design capacity of 1,330 tons/day.

Longjiang project’s total NP is RMB120mn in 2016. SIIC expects to grow Longjiang’s NP by >20% p.a. going forward through reduction of gearing. Longjiang currently has about RMB50mn of debt and the average interest cost is about 6%.

Reaching the people who run Asia's businesses is harder than it used to be.

Inboxes are crowded. Attention is short. The executives you most want to reach — the founders, CFOs, and operators who actually move budgets — are the hardest to find through the usual channels. If you're building a company, a category, or a reputation, you already know this.

We've spent twenty years building the room they read. Singapore Business Review is where senior decision makers in Singapore and across Southeast Asia come for business coverage they can't get elsewhere — in print, online, and in person at the summits and roundtables we host across seven markets.

If you have something these readers should know about — a point of view worth publishing, a product worth their attention, an event worth their time — we'd like to hear what you're trying to do.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia