Air pollution boosts companies in emissions analysis and filtration

It may just confirm what we already know — the smog is getting worse: China’s Meteorological Administration says that there were more smoggy days nationwide this year than anytime during the past 52 years. In Beijing, that includes half of the days in the month of October.

As if number alone is not alarming enough, several media articles cropped up this week that added a sense of urgency to the issue. Some such stories may seem anecdotal. On Tuesday, China News Service ran a headline shouting “smog causes cancer; youngest patient is only eight years old”. The story tells a sad tale of an eight-year-old girl who was diagnosed with malignant lung tumor, a disease that is usually associated with smokers and the elderly. Though grounded on little more than speculation, the article suggests a a cause by describing that the child’s home was next to a dusty road. On Wednesday, Hong Kong’s South Morning Post published an article that the smog might have a role to play in police’s failure to prevent a terrorist attack, in which a Uighur man smashed his vehicle against one of the bridges in front of Tian’anmen, killing everyone onboard and several passers-by on his way. Low visibility caused by smog can blind surveillance cameras, says the newspaper.

Other reports on the air more official sources. The Chinese Academy of Social Science and the China Meteorological Administration just released a “green paper”, which is supposed to be a comprehensive review of the country’s environmental situation. The book attributes a number of increasingly common health conditions to the smog, such as impairment of the immune system and “reproductive capacity”.

However, as the chart above illustrates, for investors who have hedged against the environmental challenge by investing in the environmental protection sector, this week may not be bad at all. Among other things, a policy announced by the Ministry of Environmental Protection demanded all major cities and environmental protection model cities to implement PM2.5 monitoring systems, which have boosted some companies in the sector.

Companies and brands affected
Xianhe Environmental Protection (SHE:300137)
Air and water testing equipment manufacturer. The company has been mentioned in recent news for winning major deals from government’s projects to build nationwide air monitoring network.

SDL Tech (SHE:002658)
Originally a dealer of imported equipment, the company has entered into manufacturing market by making air and smoke analysis equipment. In the end of October, media reported that the company won a bid from a Shandong water treatment company.

Beijing SPC Environment Protection Tech (SHE:002573)
Desulfurisation equipment maker specialized in power plant emission reduction equipment manufacturing and solutions.

Skyray Instrument (SHE:300165)
Jiangsu-based company specialized in spectrometers, which are used in analyzing waste consistency. Trading suspended due to news of acquisition.

CPI Yuanda Environmental Protection (SHA:600292)
One of only three companies in China that are qualified to process low and medium radiation level nuclear waste. The company is also involved in air and water pollution treatment, as well as emission reduction.

Centre Testing International (SHE:300012)
Industrial testing equipment manufacturer.

Fujian Longking (SHA:600388)
China’s first listed industrial dust filtering material manufacturer.

Xiamen Savings Environmental (SHE:300056)
Leading industrial dust filtering material manufacturer.

Links and sources
Tencent Finance channel: 报告称雾霾影响生育 环境治理再引关注
Legal Daily: 港媒:北京雾霾扰乱摄像头 影响警方监控恐怖份子
Economic Daily News (China News Service article): 雾霾天会导致肺癌 华东地区最小患者年仅8岁
South China Morning Post: Big brother blinded: Security fears in China as smog disrupts surveillance cameras

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