Secured water environment projects with total investment amount of RMB30bn (vs. RMB10bn secured in FY19) for this year
　　2mtpd of water treatment projects secured by the end of Oct. (vs. 0.8mtpd in 1H20, and 2.4mtpd in FY19) as project bidding resumes
　　Maintain BUY and DCF-TP at HKD3.7, shares are trading at 0.7x FY21E PEG if excluding construction-related earnings
　　More progress made in water environment projects
　　Since BEW’s interim results, it has sped up its movement on water environment projects through its established JVs with China Three Gorges Corporation (CTG) to participate in water environment projects in Jiangjin Chongqing, Linxiang Hunan and Wuhan Hubei. As of the latest date, BEW has won bids with c.RMB30bn investment worth of water environment projects for this year (vs. RMB10bn secured in FY19), RMB25bn of which was secured together with CTG. These new projects will apply asset-light model, i.e. participate in small-scale EPC construction, manage project operation and small stake investment. Therefore, we see its revenue from construction services for comprehensive renovation projects will follow a gradual downward trend, but this indicates cash generated earnings to increase in proportion, leading to better sustainable outlook.
　　Gaining pace in securing water treatment projects in 2H
　　BEW has also been gaining pace in securing new projects in wastewater treatment and water supply segment. As of the end of October, BEW has won 2mtpd (vs. 0.8mtpd in 1H20) of water treatment projects, which indicates the bidding process pace picked up in 2H20 as the pandemic was brought under control. We believe its traditional water treatment projects’ growth to remain intact as BEW currently has 15mtpd of projects that have not yet commenced operation (c.38% of its total water projects capacity in 1H20). We forecast its revenue’s FY20E-FY22E CAGR for treatment operation/BOT construction to be at 13%/6%, respectively
　　Maintain BUY on attractive risk/reward
　　We maintain BUY and our TP on BEW, as its growth prospect remains solid. Its shares trade at 6.0x FY21E P/E, with FY20E-FY22E’s EPS CAGR of 11.5%, implying FY21E PEG of 0.5x. We conducted a simple analysis through muting the non-cash portion of the earnings from construction segment, implying FY21E PEG of 0.7x. Valuation looks attractive.