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IBDvalueinvestin (99.58)

TRIT a Water infrastructure play in China, $11.7B allocated in 2009 for Water Infrastructure

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September 16, 2009 – Comments (3)

Too bad we can't rate TRIT today at $10.85 because its below $100M mkt cap.  Yet another example of a stock with a missed chance at getting rated at the lows.

TRIT says in its SEC filing the spending in water resources, environmental protection and other infrastructure increased 54.5% year to year. The second tranche of central government funding (RMB 130 billion, or $19.1 billion, February 2009) was allocated to rural infrastructure projects such as improving drinking water safety and electric grids and repairing roads (RMB 31.5 billion or $4.6 billion) and to environmental projects (RMB 11 billion or $1.6 billion).

According to the budget plan announced by Ministry of Water Resources, China expects to invest $11.7 billion in 2009 in water resources sectors. China’s central government has allocated $3.8 billion in the first half of 2009. With the projects the central government has approved, this investment will increase to $45 billion in the aggregate over the next 3 years. The projects include mitigation of 6,240 unsafe small and middle-sized reservoirs due to lack of proper maintenance for several years.

Based on the data shown above, we believe that Tri-Tech is likely to continue to grow in 2009 because our business scope includes water resources, flood control and mitigation, water quality monitoring and assessment, municipal water and wastewater management, water reuse, and odor control, all areas that are poised to benefit from China’s infrastructure investment.

 

3 Comments – Post Your Own

#1) On September 16, 2009 at 11:27 AM, IBDvalueinvestin (99.58) wrote:

I am jealous how did 2 members in caps get to rate TRIT when its not ratable because its under $100M??

Thats not fair..Especially if TRIT goes to $100M cap before the rest of us can rate it.

http://caps.fool.com/Ticker/TRIT.aspx

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#2) On September 16, 2009 at 12:39 PM, IBDvalueinvestin (99.58) wrote:

Oh and before you ask where is the link to the SEC filing for the amazing growth potential numbers for TRIT as listed above, enjoy reading it here:

 

http://tinyurl.com/TritSecFilingAug2009

 

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#3) On September 16, 2009 at 3:09 PM, IBDvalueinvestin (99.58) wrote:

TRIT 1st half 2009 Rev. up 75% Net income up nearly 100%

Tri-Tech Holding, Rapidly Growing Chinese Water Management Services Company, Completes Successful Nasdaq IPO. 1H '09 Revenue up 75% to $6.0M. 1H '09 Net Income $1.5M or $0.41 EPS vs. $807K or $0.23 EPS. Since 2002, Tri-Tech has worked with local and regional governments throughout China to design and implement systems to monitor and manage the country’s natural and municipal water resources. More than 200 projects have been implemented in provinces, municipalities and autonomous regions all across China. Tri-Tech designs customized sewage treatment and odor control systems for municipalities and larger cities. These systems combine software, information management systems, enterprise resource planning and local and wide area networking with hardware including sensors, distributed control systems, programmable logic controllers, supervisory control and data acquisition systems. This allows local governments to seamlessly monitor and control numerous variables in sewage treatment and odor control by managing the process from initial intake of raw sewage through the return of water to consumers for reuse. The company also designs systems for tracking natural waterways levels for drought and flood control, monitoring groundwater quality and assisting the government in managing and planning its water resources. The business is focused on Chinese cities and municipalities that need extensive monitoring and management systems expertise. The company has seven software copyrights and two technology patents. Tri-tech has 108 employees, 74% of whom are in R & D and technical support. TriTech Holding Inc. (TRIT) Sep 16 2:45 PM EDT Last Price 11.25 Change 1.01 Day High 11.50 Bid 11.15 Ask 11.24 Dividend 0.00 Last Trade 2:44 % Change 9.86% Day Low 10.31 Bid Size 2000 AskSize 100 Ex-Div Date N/A Tick Open 10.60 52 Wk Hi 10.78 EPS(TTM) N/A Shares 5.26 m Yield 0.00 Volume 414.05 k Prev Close 10.24 52 Wk Low 7.80 PE Ratio N/A Market Cap close Exchange Information Listed On Nasdaq Small Caps (NSC) 59.12 m Exchange NSC Company Overview The Major Challenge to China’s Water Resources China’s water infrastructure is under great stress. China faces widedspread water scarcity, frequent floods in the south and east and droughts in the north and west. The country also suffers serious water pollution which heavily strains the environment. China's water supply is smaller than the United States but is home to approximately five times as many people. It is estimated that 300 million Chinese citizens have no daily access to clean water. Over 700 million Chinese citizens drink water that does not meet current World Health Organization standards. Water usage in China has quintupled since 1949, and almost 90% of underground water in Chinese cities is affected by pollution. In short, China is struggling to procure clean and provide enough potable water for a growing population. As a result of the high population density, the poor ratio of available water supply to demand, and regional imbalances in available water, China faces serious challenges in managing its usable water supply. These challenges in managing water resoures provide Tri-Tech strong growth opportunites in helping to provide usable water, reduce the effects of drought and alleviate flooding. Differentiators Company Strategy Tri-Tech provides customized solutions and integrated technology to Chinese governmental bodies across China. These include extensive monitoring and management expertise following installation. Future strategies include broadening product offerings by extending product lines to upstream and downstream business segments, strengthening research, building alliances with research institutions, diversifying the client base and seeking early entry into new markets. Lines of Service Wastewater and Tail Gas Treatment Tri-Tech's sewage treatment and water recyling technology includes automation and management systems for large cities. This technology allows a city to electronically control the system to react to chemical and other changes. These systems also allow smaller municipalities to reuse and recycle both grey water and industrial waste water. Other services include patented biofiltration odor control systems, chemical scrubbing odor control and process and monitoring for recycling. Water Resource Management Tri-Tech is a leader in drought and flood control through the use of remote terminals that provide multiple levels of data including rainfall measurement and early warnings for small watershed flood hazards. Groundwater is monitored for water quality using remote terminals systems. For water resource use and management, Tri-Tech has developed irrigational and agricultural water conservation systems, a national flood control system and water resource monitoring equipment as well as systems for managing municipal water supplies. Recent News 9/09/09- Tri-Tech Holding Announces Pricing of Initial Public Offering on NASDAQ 9/09/09- Tri-Tech Holding Announces Launch of New Corporate Website * Risk Factors Single industry focus * Significant competition from competitors and new market entrants * Company unknown in U.S. * Continuing U.S. investor interest in Chinese companies The Outlook Through 2010, China’s environmental investment is expected to be approximately $184.2B. Approximately $39.5B is expected to be used for water resource management, urban water management, wastewater treatment, sewage reuse and water treatment. Between 2007 and 2009, the Chinese allotted approximately $526M in special funds to establish a National Water Resources Management System. In November 2008, the Chinese government announced a $585B stimulus package in response to the global economic crisis. This included approximately $3.3B for environmental projects. The company is currently pursuing 100 river basin flood monitoring and forecasting systems in more than 100 counties with a market potential of $72.5M. Additional projects are being pursued through distributors and partnerships with a potential value of $43.5M. The company is pursuing wastewater treatment business in several markets including Tianjin Binhai where the government plans to construct over 40 large pumping stations and 30 sewage treatment plants with a total market potential of $8.7B. Hebei Province plans to construct 50 sewage and grey water reuse treatment plants in the next two years. The company is also seeking business in the industrial wastewater and process tail gas treatment market in the petrochemical industry. Sales are expected from early flash flood warning system projects in Hubei and Tsinghai provinces. Increased sales also are anticipated in a long-distance water transfer project with dozens of urban water supply tasks for major cities including Beijing, Tianjin and Shijiazhuang where the company is already engaged. The company plans to increase its workforce and is setting up new offices.

http://www.hawkassociates.com/pdf/profile/TRIT.pdf

Use of IPO Proceeds Tri-Tech expects to receive net proceeds of $6.83M if the minimum offering is sold and $10.18M if the maximum offering is sold. Description of Use %Net Proceeds Working Captial 50% Product R & D 20% Application Expansion 15% Sales and Marketing 15% Management Chairman, CEO and Director- Warren Zhao President- Phil Fan Chief Financial Officer - Peter Dong Director- David Hu Director- Dr. Peiyao Zhang Director- Dr. Xiaoping Zhou Director- Robert W. Kraft

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