China Everbright in 'rapid phase' as investment soars
Company also says there are no checks on books and operations by mainland anti-graft agency
China Everbright International, the waste-to-electricity and waste water treatment company, is in a "rapid development phase" and has not been notified by Beijing of any investigation of its books and operations, according to its chief executive.
The firm had signed agreements on nine projects involving 3.4 billion yuan (HK$4,.2 billion) of investment so far this year, compared with 12 projects with investment of 2.48 billion yuan last year, Chen Xiaoping said.
"We have 37 projects under construction involving 12.7 billion yuan of investment, which has exceeded the more than 10 billion yuan spent on 50 projects that we have commissioned so far," Chen said. "We have entered a rapid development phase."
The company plans to commission eight projects this year, of which five are waste-to-power ventures. Last year, four projects came on stream and net profit grew 18 per cent to HK$1.32 billion.
Everbright began to switch its business focus in 2003 from road and bridge infrastructure to waste-to-energy, clean energy generation and waste and sewage treatment.
The Hong Kong-registered state-backed red-chip firm with almost all of its projects on the mainland is part of the finance-to-hotel conglomerate China Everbright Group.
Asked about a recent report that the anti-graft Central Commission for Discipline Inspection will conduct an in-depth audit on Hong Kong's five biggest red-chip firms, Chen said the company "has not received any notice" on an audit.
The other red chips are China Merchants Group, China Resources (Holdings), Bank of China (Hong Kong) and Citic Group.
While acknowledging that Beijing's anti-corruption campaign will help promote healthier development of the mainland's corporate sector, Chen said his company strictly adhered to Hong Kong's listing rules and laws, and had a strong internal control system.
"We used to conduct internal audits once every two years. Now, we do it annually," he said.
Chen also said the company's project bidding was subject to the oversight of a committee of internal and external technical experts, with no representation from the management. As chief executive, he had no power to push through any project, but could veto it if problems were found.
Since December last year, the company has been in talks to inject its waste water treatment operation into Singapore-listed HanKore Environment Tech Group in exchange for a stake of more than 50 per cent stake in the domestic rival. Chen would not comment on the progress of the talks but said a decision was expected by the end of the month.
Everbright's shares rebounded 4.84 per cent yesterday to end at HK$9.31 after falling 27 per cent since early March.