Yulong’s Waste Management Recycling Process in China Benefits Investors

The quantity of municipal solid waste generated in China’s cities has increased fivefold between 1980 and 2009, from 85,000 tons to 430,000 tons per day, and is projected to reach 1.6 million tons per day by 2030. The majority of waste in China goes to landfills or unregulated waste heaps outside major cities. As China’s landfills continue to pile up, cities are turning to burning waste to generate electricity at waste-to-energy plants.  Another major source of total waste in landfills is construction waste. Construction waste accounts for 25% of all landfill waste, which is generated from Hong Kong’s frequent construction and demolition activities. The Chinese people face big challenges regarding the management of construction and demolition waste as they continue urban development however investors who follow waste management and renewable energy company stocks are cashing in as the waste piles up.
According to a report from National Development and Reform Commission in 2013, approximately only 5% of the C&D waste was reused or recycled. Because the high cost to remove the waste, many waste management companies disposed of this material improperly and at unlicensed dumping sites. Much of this waste contained pollutants that were affecting the health of the Chinese people.
Yulong Eco-Materials Limited, a publicly traded eco-friendly building products and waste management recycling company (YECO), which is located in the city of Pingdingshan in Henan Province, China just outside of Hong Kong is a leader in solid waste recycling. Their State-of-the-Art Recycling plant has been operational since April of 2015. They hold exclusive hauling licenses for the removal and processing of construction waste within the area of Pindingshan and are expanding every day, acquiring new contracts across the country.
Yulong is not only helping to combat the construction waste problem, but also, is using the fly-ash to make bricks, which is helping to build the Chinese infrastructure while solving the pollution problem.
Most notably, however, is Yulong’s ability to do so while generating a profit. In 2015, Yulong reported revenue of 46.2 million dollars, which was a 4% increase from the year before. Their net income from 2015 was 8.7 million, which for the investor, is 1.08 per share and only trading at 2 times earnings. Yulong ended 2015 with 16.5 million in cash, giving them the capital needed to expand.
Thus far, in 2016, Yulong reported a 10.4% revenue increase and expected to finish the fiscal year strong.