I was reading news on the Reuters website when I came across the announcement that China is going to spend $277 billion to tackle air pollution problems. Previously, I would have just glanced through the content but now I am beginning to make connections between this piece of news and investment opportunities; I quickly searched through companies listed on the Singapore Exchange with the key words "air pollution control" and arrived at an interesting counter called Weiye Holdings.
The main business of the company is property development in Henan and Hainan provinces of China, but at the same time a sizable portion of its revenue came from clean room equipment and air diffusion products. In addition, the P/E ratio is 2.71 and P/B is 0.2373! The market obviously has grave doubts about the future successes of this company to give it such low evaluations, and indeed the stock price dropped a lot to below 10 Singapore cents in recent years. Since I am still very new towards analyzing the value of companies, and given the volatility of the company's stock price, I choose to take a more prudent approach and not invest into the company. However, given China's huge investments into air pollution control, I am just wondering at the back of my mind if this is indeed a value investment opportunity.
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