TIDMIAEM TIDMIAES

RNS Number : 3835D

Impax Asian Environmental Mkts Plc

15 May 2012

IMPAX ASIAN ENVIRONMENTAL MARKETS PLC

All information is at 30 April 2012 (unless otherwise stated) and unaudited.

DATA AND PERFORMANCE

 
 Pricing 
 Diluted NAV (pence)        n/a 
 Undiluted NAV (pence)      93.20 
 Share price (pence)        81.13 
 Premium/ (discount) (%)    (12.95) 
 Gross gearing ratio        13% 
 Net gearing ratio          11% 
 Data 
 Total fund size ( m)                  220.1 
 Market capitalisation 
  (m)                                  170.1 
 Management fee (%)                      1.0 
 Established                  23(rd) October 
                                        2009 
 Fund structure                   Investment 
                                       Trust 
 Exchange                             London 
 Currency                                GBP 
 ISIN Number                GB00B4M5KX38 
 Sedol                               B4M5KX3 
 Bloomberg code                      IAEM LN 
 
 
 
 Performance     IAEM Net        MSCI AC         FTSE EO         FTSE EO 
  (GBP)           Asset Value*    Asia Pacific    Asia Pacific    Japan** 
                                  (ex Japan)      (ex Japan)** 
                                  ** 
 1 month %       -5.1            -1.1            -3.8            -3.7 
 3 months %      -1.2            -0.3            -2.6            -0.3 
 YTD             +6.6            +8.2            +7.8            +4.9 
 1 year          -24.8           -7.9            -24.1           -4.0 
 Since launch    -4.9            +18.1           +5.4            +12.6

* Performance data is for undiluted NAV ex income (unaudited)

The Company is geared via a bank facility (amount drawn down since initial drawdown on 6 May 2011: US$40m)

** Total return. Source: FactSet, WM Reuters

TOP TEN HOLDINGS

 
 Company                  Description                    Country        Holding 
                                                                         % 
 ENN Energy               Natural gas distribution       China              3.8 
 Rinnai                   Efficient water heaters        Japan              3.6 
 Delta Electronics        Power electronics              Taiwan             3.5 
 China Everbright         Water and waste treatment      Hong Kong          3.5 
 Xinyi Glass              Energy efficient glass         Hong Kong          3.3 
 Epistar                  LED manufacturer               Taiwan             3.2 
 SFA Engineering          OLED equipment manufacturer    South Korea        3.1 
 China Longyuan           Renewable IPP                  China              2.8 
 China Metal Recycling    Metal recycling                Hong Kong          2.8 
                          Electronics manufacturing 
 Chroma                    equipment                     Taiwan             2.7 
 TOTAL                                                                     32.3

PORTFOLIO ANALYSIS*

 
 Country exposure       Company size 
  Japan           17%   >$5bn      16% 
  China & Hong 
   Kong           41%   $1-5bn     51% 
  Taiwan          12%   <$1bn      31% 
 South Korea      8%    Other      1% 
 India            7%    Cash       1% 
 Singapore        3% 
 Philippines      4% 
 Thailand         3% 
 Australia        3% 
  Indonesia        1% 
  Cash             1% 
 
 
  Sector                                          PE ratio** 
  Alternative energy             12%       >20x                     4% 
  Energy efficiency              39%       15-20x                  18% 
  Diversified environmental       7%       <15x                    75% 
  Waste management               14%       Cash                     1% 
 Pollution control               11%       Other                    2% 
                                            Average P/E 
   Water infrastructure          16%         ratio               11.3x 
   Cash                           1% 
 
  * of funds invested as of 30 April 2012 
 **Forward 12 months. Where analyst estimate 
  not available historic figure used.

IMPAX ASIAN ENVIRONMENTAL MARKETS PLC

MANAGER'S COMMENTARY (April 2012)

Market Review

News flow and market sentiment have been mixed in April. Continued monetary loosening and a stronger than expected PMI reading in China was offset by political uncertainties in Europe, and mixed US economic figures. Meanwhile Asian export orientated economies, in particular South Korea and Taiwan, had rather weak export figures. Environmental policy momentum in Asia remained strong, but the high oil price caused concerns over increasing inflationary pressure.

Performance Summary

Gradual improvements in PMI and resumption of infrastructure spending in China, Japan's proposals to adopt generous solar feed-in-tariffs and India's energy efficiency targets for large polluting industries all contributed to performance in April. Manila Water (water supply utility, Philippines) performed well on a new project win and submission of a new investment plan to the regulator. Xinyi Glass (energy efficient glass, Hong Kong) rose on improving glass pricing, while Thai Tap (water supply utility) performed well having beaten Q1 earnings expectations.

Uncertainty in Europe over the French and Greek elections and weak export data from Korea and Taiwan, despite recovering US demand, detracted from performance in April. Selected stocks with weak Q1 results that led to underperformance included LG Chem (chemicals and efficient batteries, South Korea), Chroma (electronics manufacturing equipment, Taiwan) and Regent Manner (LED components manufacturer, China).

Positioning and Outlook

Our quarterly environmental subsector outlook shows fundamentals improving across most subsectors. Pollution control and construction-related subsectors are more positive on improving credit conditions while subsectors such as LEDs have recovered as the supply demand balance has become more favourable for equipment and product producers. The oversupply situation for renewables equipment remains acute, although we started to see some signs of industry consolidation.

Asian environmental policy momentum remains strong and government policies continue to be supportive for environmental sectors, particularly for energy efficiency and renewables, counterbalancing weakness from on-going renewable subsidy cuts in Europe. In Japan, the government's energy efficiency programme was expanded as the country continues to adjust to the post--Fukushima era. In China, a new LED--light subsidy program was introduced and 160bn Yuan in rural water infrastructure investment was announced. The US unveiled lower than feared import duties on Chinese solar equipment.

We are currently maintaining a well--diversified portfolio by subsector, reflecting a balance of defensive companies with visibility on earnings and high quality cyclical holdings. Energy efficiency remains a key subsector bias. Portfolio valuation remains compelling with portfolio PE of 11x based on NTM with 20% EPS growth. This represents a discount to global markets on a PEG ratio basis. The fund is positioned to perform well as the global economy continues to recover and longer term environmental themes play out.

 
 Latest information available at: 
 http://www.impaxam.com/listed-equity/listed-equity-investment-strategies/asia-pacific 
 
 Impax Asset Management is supportive of the UK Stewardship 
 Code. Our full Stewardship Code statement, ESG and Proxy Voting 
 policies and the quarterly summaries of our proxy voting activities 
 can be viewed on: 
 http://www.impaxam.com/investor-relations/environmental-social-governance-issues

15 May 2012

This information is provided by RNS

The company news service from the London Stock Exchange

END

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