Guide reading: driven by garbage classification, the sanitation industry has been developing rapidly in the 13th five year plan, and the market-oriented and integrated industries have entered the acceleration period. In 2021, the 14th five curtain will be opened. With the new requirements of double leapfrogging of solid waste industry in the new period, the environmental sanitation field will continue to upgrade and integrate, and a total of opportunities will be met.
In 2020, the Fifth Plenary Session of the 19th Central Committee of the party has drawn a grand blueprint for the development of various undertakings of the party and the state in the next five years or more years, and has clarified the development objectives and paths, emphasized the implementation of garbage classification, reduction and resource-based, reflecting the accurate judgment of the new stage and new tasks in which the waste treatment is located. Driven by the work of domestic waste classification, the top-level design and system mechanism of sanitation industry are increasingly perfect, facilities and equipment are accelerated, management level is continuously improved, and scientific and technological innovation is also constantly improving. A series of strategies, such as garbage classification, no waste City, prohibition of foreign garbage entry, reducing the use of disposable plastic products and prohibition of food and beverage waste, form a set of combined boxing, which together constitute a grand background for promoting the upgrading and development of environmental sanitation industry“ During the 14th five year plan, the market-oriented environment and sanitation will be further upgraded and a high-speed development period will be ushered in.
The market-oriented development is rapid, and the epidemic impact is limited and rebound is good
According to the observation of E20 Research Institute, since the 18th National Congress of China made clear the transformation of government functions, the market-oriented environment and sanitation began to increase in 2016, and the market-oriented speed of sanitation increased significantly by 2018, and the number of monthly winning projects and the amount of services in the first year have been rising. In 2020, the first quarter was affected by the epidemic, and the market as a whole fluctuated greatly. However, as one of the basic public services to ensure the city operation, the market has been warmer earlier. Under the influence of the epidemic, the project won the bid in February, rebounded in March, and the market gradually released from March to June, and the overall growth trend has not changed“ During the 13th five year plan, the market-oriented environment and sanitation has developed rapidly, with a compound growth rate of 23.05% of annual service amount.
Figure 1 the annual service amount of sanitation project has been rising continuously in recent years
Data source: E20 data center, e-standard
The total amount of environmental sanitation contract winning has reached 22.8 billion yuan from less than 100 billion in 2016 to 2018. In 2019, the market-oriented growth rate in the mid market slowed down, but the market performance remained above RMB 2200billion.
Figure 2 the market-oriented environmental health service in China has been continuously promoted in recent years
Source: Ping An Securities Research Institute
Business model still needs to be cautious, and the number of "reappearance" franchises in 2020 will exceed PPP
With the development of sanitation integration, the management mode of sanitation project is quietly changing, from the past single project contracting to sanitation integration and PPP joint venture. Compared with single project contracting, the service scale of the latter two business models is larger, so the entry threshold is high and the capital requirements of enterprises are high. Companies in the industry are seeking to be listed in succession also reflects the industry's demand for capital. Capital advantage has become the key factor of the company's ability to take orders and expand its business in the future.
After many years of market-oriented purchasing services, the new PPP mode has made the sanitation fragmentation project a packaged, regional and long-term project, which has brought the explosion of sanitation industry in recent years. The scale of sanitation market projects has risen from tens of millions to billions. The successful implementation of the sanitation integrated PPP project will achieve scale effect and synergy effect at the project level, reduce investment, construction and operation costs, which will be beneficial to both government and enterprise, and also to improve the environmental quality of the whole city and ultimately benefit the public. For the participating enterprises, with the increase of integration degree of sanitation integrated PPP project, the overall benefits of the project itself will be more considerable. For local governments, the environmental sanitation integration project can solve the problems of local urban and rural areas and upstream and downstream links at one time, liberate the government from "overall contracting", and focus on supervision and performance appraisal. This is also the reason why sanitation integrated PPP projects are increasing and the landing rate is high.
But on the practical level, the sanitation integrated PPP project also faces some "pain points". First, it is mainly in the related counties, cities, towns, villages and other projects, performance appraisal and payment mechanism practice has some difficulties. Some comprehensive and strong integrated sanitation PPP projects have vague cooperation boundary. The government and social capital (or project company) may differ due to some details (such as actual collection and transportation, transportation distance, processing capacity, assessment standards, etc.). Second, some projects involve problems such as storage facilities, equipment, personnel placement or user payment, and the difficulty and risk of project implementation will increase accordingly. Third, the instability factors in the project, such as region, season, special activities, etc., may have an impact on the implementation of the project. The government and enterprise shall pre judge in advance and reflect them in the PPP contract or supplementary agreement to avoid hidden dangers for implementation. In summary, similar to other PPP projects, it is important to select the appropriate government, participate in the compliance project and strive for reasonable return in the field of sanitation integrated PPP.
In 2017, the circular on regulating the management of the project library of the government and social capital cooperation (PPP) comprehensive information platform (PPPs) which had a significant impact on the development of PPP was issued successively by the Financial Bureau Jin [2017] No. 92 and the notice on strengthening the risk control of PPP business of central enterprises (gzfgg [2017] No. 192), which further standardizes PPP and the PPP policy is tightened. The E20 Research Institute believes that the solid waste PPP project, especially sanitation PPP project, has clear output and performance, and the payment mechanism is mature and has strong operation, which can meet the current policy requirements, and the market needs not to worry too much.
In the non integrated project, there are many links in the "big sanitation", and the corresponding PPP mode and payment mode are adopted for different links marketization. The integrated project of environmental sanitation, including cleaning, cleaning, transfer, collection and transportation, and treatment, mainly uses garbage treatment fee or comprehensive payment method. The following figure shows the PPP mode and payment mode adopted in all aspects of "big sanitation" marketization.
Figure 3 list of payment mechanisms under PPP mode in sanitation
As for the compliance rate of the project, the compliance rate of the sanitation market-oriented project over 3 years during the 13th Five Year Plan period is 10.30%.
Figure 4. Market-oriented purchasing services for sanitation for more than 3 years during the 13th Five Year Plan Period & changes of PPP & non PPP franchising projects (by project quantity)
Data range: January October 2016-2020, dotted line is expected
Data source: E20 data center, e-standard
From the perspective of project life, the market-oriented projects of sanitation in China are still mainly short-term projects, with the number of sanitation projects accounting for more than 60% in one year and over 94% in three years. The short project cycle also provides a good basis for the activity of sanitation market, which is conducive to more solid waste enterprises entering the field of sanitation to allocate resources in a relatively short period.
Figure 5 the cooperation period of sanitation market-oriented project is relatively short as a whole
(data range: January October 2016-2020, dotted line part is expected)
Data source: E20 data center, e-standard
Among them, the majority of the sanitation market-oriented projects purchasing services are within three years, and eight become less than 5 million projects.
Figure 6 distribution of the number of years of the market-oriented projects for purchasing service sanitation during the 13th Five Year Plan Period
(data range: January October 2016-2020, dotted line part is expected)
Data source: E20 data center, e-standard
Figure 7 scale distribution of market-oriented projects for purchasing service sanitation during the 13th five year plan
Data source: E20 data center, e-standard
Under the influence of garbage classification, sanitation technology and equipment meet the needs of upgrading and upgrading
As the middle link of the whole process of urban solid waste management, the interaction between the environmental sanitation industry and the national policy of "garbage classification" has brought about by the traditional collection and transportation mode, vehicle equipment and management process, which are facing the need of comprehensive upgrading from technology to management under the requirements of Classified collection and transportation. In 2019, in the face of the confrontation between "old problems" and "new fashion", the environment and sanitation industry ushered in a new proposition of equipment and technology upgrading under the dual trend of "marketization" and "integration".
Figure 8. The upgrading requirements of sanitation service and equipment under the influence of triple interaction
According to the E20 Research Institute, after the implementation of garbage classification, the traditional sanitation vehicle receiving and transportation equipment can not meet the requirements of classified collection and transportation. In addition to the conventional operating service costs, the sanitation industry is faced with the investment demand of vehicle purchase, transfer / compression station upgrading and system intelligent improvement. It is estimated that the investment space of sanitation equipment and facilities will increase by 13.8%.
Figure 9 waste classification brings new business opportunities to sanitation equipment enterprises
The concept of "urban housekeeper" is the initial prototype of real estate property cross-border, and traditional sanitation enterprises still have advantages
In 2020, the flow of large-scale enterprises such as Bigui garden and Yaju Le environmental protection from the cross-border real estate industry attracted great attention in public opinion, but it has not affected the sanitation market pattern in fact. Over the years, the sanitation industry has formed its own business logic and industrial chain, and the projects taken by cross-border enterprises account for relatively low. The essence of competition is the competition between sanitation enterprises, and there is no competition between real estate, property and sanitation. At present, sanitation enterprises have the ability of comprehensive urban environmental services. The cross-border enterprises are "in a rough situation" but the advantages of traditional sanitation enterprises are still obvious.
The real estate enterprises have long coveted the sanitation market. In the first half of 2020, many property companies have won the environmental sanitation project and urban service project. In March, Longhu property won the bid for the city management project of Chongqing Liangjiang Collaborative Innovation Zone; In May, Biguiyuan won the market-oriented project of environmental sanitation in Shouyang County, and poly property won the road cleaning and cleaning project in Jianxi District, Luoyang City, AVIC won the bid, namely, the comprehensive service project of urban space property in Meijing Economic Development Zone, and the green city property won the bid for Dongting water area cleaning project of Yueyang City; In June, the property of China Merchants Bureau and Jindi property won the bid for the comprehensive urban management service project of Dongguan Songshan Lake high tech Zone
According to data, 3322 enterprises have added sanitation business as of May 18, 2020, 195 of them are property related enterprises, accounting for 6% of the total amount in 2020. Some industry insiders pointed out that property enterprises involved in the scale and scope of environmental sanitation is small. The main winning projects are small projects, with service life of more than 3 years and less, annual service amount of more than 5million and below, limited territory, and most of them are awarded by local property enterprises.
Figure 10 distribution of competition subjects of enterprises of different scale environmental sanitation projects
Data source: E20 data center, e-standard
E20 research found that the property enterprises mainly participate in the front-end garbage classification and mid end sanitation service projects. The winning projects or their service contents overlap with the sanitation cleaning and cleaning business content, or expand from the garbage generation link (within the community) to the garbage circulation link.
In summary, the real estate enterprises want to form a certain scale in the field of environmental sanitation, and are facing the systematic change of management system, and there are still great challenges and difficulties. Some insiders pointed out that the property enterprises belonging to large-scale real estate enterprises are different. The real estate and property businesses of such enterprises are all over the world, and the expansion ability outside the country is not common. At the same time, they have strong capital capacity and urban development synergy effect, which is a powerful competitor of sanitation market-oriented enterprises.
On the other hand, the current garbage classification is forced to implement hot fire, and explore the garbage treatment charging mode is in the immediate future. Property enterprises are closer to users (garbage producers), so they have obvious competitive advantages in the related business of garbage classification.
According to the data, only considering the market-oriented scale of sanitation can bring 10% to 20% increase in the scale of the property industry. In the environment of changing and seeking survival, the property company will inevitably go to the form of "urban service provider". With its own advantages of revenue, profit and scale, the property enterprises will also grasp the "big cake" of environmental sanitation. In order to occupy a larger market rapidly, it has become the main means for property companies to expand business and expand scale by using intelligent technology to improve management efficiency and control cost. High efficiency management is realized through artificial intelligence, big data, 5g and Internet of things, so as to improve the operation efficiency of environmental sanitation enterprises and reduce management cost. Smart environmental protection is bound to become an increasingly important area for environmental sanitation enterprises, which has become an important aspect of property enterprises to occupy the sanitation market.
In addition, the cooperation mode of listed enterprises + property of sanitation will be more and more. In June 2020, the first mock exam of the environmental sanitation integration project, Limited by Share Ltd, and the cooperation agreement of the world health and environmental services development group, signed by the Limited by Share Ltd, the Yuhe Tian environmental development group, is rare. Professionals believe that more cooperation between property companies and sanitation companies will be seen in the future.
At present, the cooperation between the two sides is greater than competition in the short term. The sanitation industry is in a fast market-oriented stage, with low concentration and far from entering the integration period. In this case, the two sides are not strong competitive relationship, and it is a trend to jointly expand the sanitation market.
In summary, the property enterprises have a certain impact on the sanitation market-oriented enterprises, especially the property enterprises belonging to large-scale real estate enterprises such as Biguiyuan and poly property, which will become one of the new forces in the competition of the sanitation market in the future. In addition, with the continuous improvement of the intelligent direction of property enterprises, it will also promote the further development of the environmental sanitation industry. However, in terms of short-term market performance, due to the large number of practitioners in the sanitation industry, the project volume is huge, and the entry of cross-border people in the short term will not have a fundamental impact on the traditional sanitation enterprises.
Summary
Since 2020, the policy has been continuously required to drive the market-oriented rate of sanitation to improve efficiency, improve quality and reduce financial pressure. With the enhancement of health awareness and the improvement of environmental protection standards, the marketization of sanitation has become an inevitable trend. The relevant policies of sanitation were issued to promote the further development of the industry. According to the calculation, China's sanitation service market is expected to exceed 400billion yuan in 2025, and the market size of sanitation equipment can exceed 20billion yuan, with a good development prospect. The number of large orders in sanitation market increases, and the competitive advantage is prominent, and integrated business will become the mainstream of the industry.
The market-oriented environment sanitation industry in China started late, and the first large-scale release was ushered in during the 13th five year plan. At present, it is still in the stage of high-speed development. It is expected that the competition will gradually become hot in the 14th five-year plan stage.
At present, the domestic sanitation market mainly focuses on the "collection transportation location" link of garbage treatment, namely, urban and rural road cleaning, garbage collection and transportation, and garbage treatment. In fact, in addition to the above three traditional sanitation markets, the market-oriented operation of sanitation has become increasingly rich in recent years. Especially in coastal economic developed areas such as Guangdong, Zhejiang, Jiangsu, Shanghai, Shandong and Fujian, new service formats emerge in endlessly, showing obvious characteristics of "urban service", The subdivision of sanitation service industry has begun to emerge in the provinces and cities of southeast coastal areas.
Original title: report release: the market of sanitation service is expected to exceed 400billion in 2025
Link to article: environmental protection online https://www.hbzhan.com/news/detail/140560.html
