2013 Full Performance Report
The cleantech industry is split into a number of sub-sectors as detailed in the table below. Each of the sub-sectors contains companies that have both environmental and economic benefits.
Geothermal - Hot dry rocks and conventional
Low Emissions Transport Technologies
Solar Thermal and Photovoltaics
Energy Efficiency & Biomaterials
Waste Management & Recycling
Energy Storage & Fuel Cells
Wave, Tidal & Hydro
The cleantech sector is fundamentally different to Socially Responsible Investments (SRI) or Environmental, Social and Governance (ESG) performance. SRI and ESG look at incremental improvements in company performance and can be seen as 'operational hygiene' measures that find the best in class. Cleantech focuses on companies whose output positively enhances the communities and ecologies in which they reside. It is about doing 'more good' rather than 'less bad'.
With 151 companies falling under the coverage of the Index and with a combined market capitalisation of over 980 billion Renminbi (US$160 billion), the China CleanTech Index presents for the first time a picture of the Chinese cleantech industry's growth in a single measure.
The Index is weighted by market capitalisation and is benchmarked against the following indices to show its relative performance:
- Wilder Hill New Energy Global Innovation Index (NEX) - which measures the performance of global clean energy stocks
- Cleantech Index (CTIUS) - which measures the performance of global cleantech stocks
- China Shanghai Composite Index (SHCOMP) - which measures the performance of stocks listed in Shanghai.
- MSCI World (MSCI) - which provides a measure of the performance of global stock markets.
The rules for the formulation and management of the Index have been developed with reference to global best practice. An overview of these rules is provided in the Index Launch Report.
The China Cleantech Index is updated each month and published on the SinoCleantech website at www.sinocleantech.com and on the Australian CleanTech website at www.auscleantech.com.au. It is published internationally in conjunction with Cleantech Investor (www.cleantechinvestor.com) and in China in conjunction with Top Capital (www.topcapital.cn).
Monthly results can be emailed directly to interested parties by subscribing at www.sinocleantech.com.
Differences to the other Low Carbon Indices in China
There are other stock market indices that track the performance of some of China's cleantech stocks. However, none of these is as comprehensive as the China CleanTech Index for the following reasons:
- All cleantech companies that have headquarters in Mainland China, Hong Kong and Taiwan are included in the China CleanTech Index, which provides much wider coverage than other indices.
- There is no lower limit to market capitalization for inclusion in the China CleanTech Index meaning that all cleantech companies are included. The China CleanTech 20 gives a measure of the performance of the large cap stocks in the sector.
- The China CleanTech Index excludes nuclear, clean coal and natural gas, which are not considered to be 'cleantech'.
- The China CleanTech Index includes biofuels, green buildings, biomaterials, carbon trading, geothermal and environmental services, all of which appear to be missing from other indices.
- The China CleanTech Index will be rebalanced quarterly whereas other indices are generally only rebalanced annually.
China CleanTech Index Performance
The China CleanTech Index underperformed all but one of its benchmarks for the month of December 2013.
The China CleanTech Index fell from 45.3 to 44.4 over the month of December recording a 2.1% loss. This compared to the NEX gain of 0.9%, the CTIUS gain of 3.0%, the Shanghai Composite loss of 4.7% and the MSCI gain of 2.0%.
The China CleanTech 20 fared slightly worse with a loss of 2.4%.
Over the fourth quarter of the 2013, the China CleanTech Index recorded a gain of 6.5%, outperforming the NEX gain of 6.1% and the Shanghai Composite loss of 2.1% but underperforming the CTIUS gain of 9.1% and the MSCI gain of 7.6%.
For the 2013 calendar year, the China CleanTech Index outperformed the general market measures of the Shanghai Composite and the MSCI but underperformed the cleantech focussed indices of the NEX and CTIUS. For the full year, the China CleanTech Index recorded a gain of 29.2%, compared to the NEX gain of 53.7%, the CTIUS gain of 37.0%, the Shanghai Composite loss of 6.7% and the MSCI gain of 24.1%.
When compared as an investing strategy into Chinese stocks the China CleanTech Index outperformed the Shanghai Composite by over 35% for 2013.
The market capitalisation of the 150 stocks in the China CleanTech Index is RMB 983 billion (US$163 billion), prior to its rebalance, falling from its peak of RMB 1,005 billion recorded in November 2013.
Best and Worst Stocks
The best and worst performers in terms of share price performance over December, the fourth quarter and full year of 2013 are shown in the table below.
Over the month, 6 companies recorded share price gains of more than 20% and 12 companies recorded losses of more than 20%. Over the quarter, 14 companies recorded share price gains of more than 40% and 7 companies recorded losses of more than 40%. Over 2013, 28 companies recorded share price gains of more than 100%, with 13 of these being solar companies, and 7 companies recorded losses of more than 40%.
The China CleanTech Index underwent its quarterly rebalancing at the end of December which took account of recent share issues and other corporate activity.
The following company was added to the index at the end of December following ongoing research by Sino Cleantech into the activities of Chinese listed companies.
- Comtec Solar Systems Group Limited (HKG:0712) - Comtec Solar Systems Group is an investment holding company. The principal activities of the Company and its subsidiaries are the manufacture and sales of solar wafers and ingots, with a focus on high quality monocrystalline solar wafers. The Company's products include solar grade products and semi grade products. Solar grade products include pseudo square wafers and pseudo square bricks. During the year ended December 31, 2011, its sales volume increased by 34.2% from 165.5 megawatt to 222.1 megawatt.
To provide an analysis of the China CleanTech Index, eight sub-indices have been developed. The performance of each of these sub-indices over the last five years is shown in the table and charts in the link below.
All but one of the sub-indices recorded gains for the quarter. The only sub-index that had a negative result for the three months to December 2013 was the China Hydro Index that recorded a 4.1% loss. The best results were the 15.1% gain for the China Wind Index and the 12.5% gain for the China Water Index.
For the full year, whilst all sectors other than the China Hydro Sector showed strong performances, the best performing sectors were China Solar Index with a 76.9% gain and the China Wind Index with a 48.5% gain. The worst performing sectors were the China Hydro Index with a loss of 9.9% and the China Efficiency Index with a gain of only 23.5%.
China CleanTech 20 Constituents
The 20 largest Index constituents by market capitalisation on 31 December 2013 are provided in the table below. These stocks will be the constituents of the China CleanTech 20 until the Index rebalance on 31 March 2014.
In the China CleanTech 20, the greatest sub-sector representations are Water with seven companies and then Wind with four companies.
The only new entrant to this list at this rebalance is Zhejiang Fuchunjiang Hydropower Equip which has taken the place of Beijing SJ Environmental Protection & New Material Co Ltd.
The profile of the constituent companies that comprise the China CleanTech Index provides some context for its performance. The 151 constituent companies are listed on twelve different exchanges, although 74% of them are listed on the exchanges in Shanghai, Shenzhen and Hong Kong. There are a further 15% listed on exchanges in North America.
When considering the total market capitalisation on each exchange, the figures show an increased focus on the Chinese exchanges. With only 20% of the companies, the Shanghai Exchange holds 35% of the Index's total market capitalisation. Combined with Shenzhen and Hong Kong, these three exchanges hold 94% of the total market capitalisation.
When considering the various sub-sectors present in the China CleanTech Index, the company numbers are lead by Solar (24%) followed by Water (16%), Energy Efficiency (13%) and Wind (12%).
The market capitalisation of the sub-sectors shows that Water (24%), Hydro (17%), Wind (17%) and Solar (16%) are the largest groups. The performance of these larger sub-sectors therefore impact the overall Index performance to a greater extent than the smaller sub-sectors.
An analysis has also been completed on the sizes of companies that are included in the Index in terms of ranges of market capitalisation. As shown in the chart below, most companies (55%) are in the market capitalisation range of RMB 1 billion to RMB 5 billion.
To view the full report including tables and charts, please visit:
About Sino CleanTech
Sino CleanTech publishes the China CleanTech Index and facilitates Chinese Cleantech investments and provides services to Government agencies across Asia to help stimulate investment in the Cleantech industry. These investments include looking at listed cleantech stocks and direct investment into projects and companies. Sino Cleantech is active in facilitating:
- Investment from Chinese investors into cleantech in both China and internationally; and
- Investment from international investors into the Chinese cleantech market.
Please contact us if you are looking for funding or seeking investments.
Zhejiang Fuchunjiang Hydropower Equip.
Xinjiang Goldwind Science & Tech Co Ltd
Tsinghua Tongfang Co., Ltd.
Tianjin Capital Environmental Protection Group
Sinovel Wind Group Company Limited
Huaneng Renewables Corp Ltd
GCL-Poly Energy Holdings Limited
Fujian Longking Co., Ltd
China Longyuan Power Group Corporation Limited
China Everbright Limited
Chengdu Xingrong Investment Co., Ltd
Beijing SPC Environment Protection Tech
Beijing Originwater Technology Co.,Ltd
Beijing Enterprises Holdings Limited