This report comes from environmental protection online: in terms of environmental protection, state-owned ownership boom, is still continuing.

In the past period of time, environmental private companies such as Snow Wave Environment, Baan Water and other environmental companies have embarked on the road of marriage with state capital. Another incomplete statistics, so far about 18 environmental protection companies through equity transfer, joint restructuring and other forms of cooperation to achieve or announce the promotion of change of ownership. The range covers almost all areas of environmental protection industry, including many private environmental protection leading companies, Bi Water, Guozhen environmental protection, Tihan Ecology, Botian Environment, Jinjiang Environment and other head of private companies have given or plan to give up control. In addition, a number of environmental companies have introduced state-owned background investors as strategic investors, such as Xinyuan Environment, Mengcao Ecology, etc..

In the second half of 2018, with the tightening of financing policies, private environmental protection companies are under increased financial pressure and have to seek strategic cooperation. The immediate reason for the "lack of money" is, in general, due to the strong advance nature of the main business of some environmental protection companies, financing pressure has increased. Many environmental projects require financing, but compared to state-owned enterprises, private enterprises often have higher loan financing costs. In order to get out of the predicament, they end up more choice is still to attract state-owned capital into the bureau, the implementation of mixed reform. In the development of private enterprises encountered difficulties when the state capital to decisively step in to help renew life out of trouble.

The traditional environmental protection industry is an asset-intensive industry, with large initial investment, the slow recovery costs of late operation. But as a state-supported emerging industries, and there is a great market demand, the environmental industry is natural to these central enterprises, state-owned enterprises into the vision. Relative to the large investment and long settling time of environmental governance, central enterprises undoubtedly have a head start on the financial sustainability. Through cooperation with private environmental protection enterprises, state-owned enterprises can also fill their own gaps in the corresponding areas or strengthen their own advantages. State-owned enterprises, especially large infrastructure construction category central enterprises, in the development of this industry to a certain bottleneck period, facing the inherent need for transformation, so a large number of state-owned enterprises through mergers and acquisitions into the environmental field.

State capital by taking over the way relief, so many environmental protection companies "back from the dead", the business improved significantly. Coupled with orders, business improvements, for companies with poor fundamentals, the performance reversal will be more obvious. Environmental protection online in combing water, Oriental Garden and dozens of environmental protection listed companies results found that net profit to achieve year-on-year growth of 5, down 6, of which 3 in the loss state. So far, with state-owned bailout, no surprise, the aforementioned environmental protection listed companies basically no delisting worries. In the long run, the introduction of state-owned capital in private environmental companies helps to solve the problem of credit enhancement, guarantees and risk sharing when using financing tools.

The market competition pattern, market resource allocation, and capital chain transmission in the environmental industry have all changed significantly in recent years through mixed reforms. At the beginning, the market may be relatively small and less suitable for large volume companies to come in, but after years of development, the environmental protection market space continues to grow. Some consultants predict that the output value of China's energy conservation and environmental protection industry is expected to reach 10 trillion yuan in 2020. However, it will take some time to implement the improvement in profitability on the corporate side and the decline in debt leverage pressure. Also as Ma Hui, secretary general of the National Federation of Industry and Commerce Environmental Chamber of Commerce, said, "Although the financing of environmental protection enterprises has improved since last year, the environmental protection industry as a whole is still in the doldrums, with weak corporate revenue and profitability."

And the future of environmental governance needs to be a comprehensive effect, from decentralized governance more to regionalization, watershed-based integrated governance change. In the view of many industry insiders, the environmental protection industry is moving from a private dominated to a new pattern of state-owned enterprises. The next market pattern in the field of environmental protection has become more obvious, the future will be dominated by state-owned enterprises, leading the integration of resources, investment and construction, to do some centralized environmental remediation, including national and regional large-scale projects. Private environmental companies are turning to niche market segments or core technology, products and service capabilities to participate in the industrial division of labor pattern.

From an industry-wide perspective, within the next five years, the environmental industry will enter a phase of major reshuffling and restructuring. The trend of state capital into environmental protection companies or increase the percentage of shareholding will continue. From the general logic and direction, this is a trend, but also the process of survival of the fittest. After all, a good business model plus good technology, coupled with capital boosting, is the future of the industry. The environmental protection industry in general, private enterprises came in early, state-owned enterprises came in late, but the environmental protection industry infrastructure investment is large, both need to play a role.