It told Bursa Malaysia that the 22-year agreement, in relation to 60%-owned Shaoxing Mega Heat & Power Co Ltd (SMHP), would not be extended when it expired on Oct 22, 2017.
Mega First attributed this decision to the Chinese government’s ever-stricter environmental protection policies.
It said SMHP’s plant, being a coal-fired thermal plant, and its garment and textile customers were being directly targeted due to their contribution to environmental pollution.
Mega First noted that since early 2015, SMHP’s earnings had been falling rapidly due to these factors outside its control.
“The expiry of the agreement will result in the future loss of earnings contribution from SMHP. SMHP accounted for 34%, 27% and 21% of the group’s revenue, after-tax profit and net profit attributable to shareholders respectively in the financial year ended Dec 31, 2016,” the company said.
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Is hard to do business in china
2017-10-18 17:28