Central Asia beckons for China’s waste-to-energy champion

As China’s waste disposal firms face a growing fight for domestic market share, Hunan Junxin Environmental is looking for sustained growth overseas

Key takeaways:

• The waste-to-energy operator has filed for a Hong Kong listing to raise funds to develop its facilities after securing two major contracts in Kyrgyzstan
• The company’s profits surged in the first three quarters of last year, surpassing its full-year 2024 earnings

By Lee Shih Ta

Turning trash into cash has become a big business in China, where nearly 720,000 tons of municipal waste are produced every day.

The heat from incinerating that mountain of waste has increasingly been converted into electricity, turning urban trash into an energy resource.

One of the big regional operators in the waste management business, Hunan Junxin Environmental Protection Co. Ltd. (301109.SZ), has now filed for a listing in Hong Kong as it seeks to expand its reach into central Asia.

The company operates across the waste-to-energy cycle, building and operating incineration plants, collecting treatment fees from local governments and selling electricity to the grid. This is a capital-intensive business, with big upfront investment needs and long payback periods, but it can over time generate a relatively predictable income stream.

Junxin makes around 60% of its money from waste disposal fees and up to 40% from sales of electricity. The company’s approach differs from a common waste industry model that relies more heavily on one-off projects for designing and building plants or on equipment sales. Junxin operates more like a provider of public infrastructure, smoothing out cyclical risk through long-term contracts.

In 2024, the company’s revenue jumped 31% to about 2.41 billion yuan ($350 million), while annual profit rose around 5% to 686 million yuan. But the pace picked up in 2025, as revenue rose 21.5% in the first three quarters to nearly 2.12 billion yuan, while net profit surged almost 62% to 825 million yuan, surpassing the full-year earnings from the previous year. Operating profit grew even faster, at a rate of nearly 55%, driving the improvement in margins.

Scramble for trash

During the first three quarters of 2025, Junxin generated net operating cash flow of nearly 1.16 billion yuan, a year-on-year rise of around 60%. The amount of incinerated household waste rose 7.89% over the same period to 2.7 million tons, while the electricity generated increased 17.53% to approximately 1.29 billion kWh.  Electricity generated per ton of waste rose 4.72% to 479.10 kWh, helping to boost gross margin to 57.1%, 15.6 percentage points higher than at the end of 2024.

But over the last two years, China’s waste incineration sector has overheated. The nation’s incineration capacity exceeds 1.15 million tons per day, far above the waste collection volume of around 720,000 tons, leaving roughly 40% of incinerators idle or running at low utilization rates. In some eastern coastal regions, incineration plants have even begun bidding aggressively for trash at elevated prices just to keep their facilities running. With overcapacity at home, Junxin has been looking overseas for waste to burn.

Central Asia opportunity

Guided by China’s Belt and Road infrastructure scheme, Junxin’s ambitions have focused on Central Asian countries such as Kyrgyzstan and Kazakhstan, which have been grappling with a dual problem of limited capacity for waste treatment and tight power supplies. Their structural challenges align directly with the Junxin’s waste-to-energy business model.

In a flagship project, Junxin brought the region’s first modern waste-to-energy incineration project online in the Kyrgyz capital, Bishkek, in December last year, easing local disposal pressures and power shortages. Then in January the company secured a project in Kyrgyzstan’s Osh City, with potential capacity of 2,000 tons per day and a 35-year concession term. The company has also signed up for an investment project in the Issyk-Kul region. Meanwhile, Junxin has invested in similar projects in Almaty, Kazakhstan, making inroads across Central Asia.

The company’s executive team have backgrounds in the military and infrastructure projects. Chairman Dai Daoguo served as an artillery officer and was on the frontlines of a conflict between China and Vietnam in the 1970s. After leaving the army, he worked in the local tax system before moving into road and bridge construction in the 2000s and eventually pivoting into waste and green energy.

Leng Chaoqiang is also a former artillery officer who rose up the Junxin company ranks from project manager to executive director and general manager. After he led the rollout of incineration projects in Liuyang and Pingjiang, Leng’s gross annual remuneration in 2023 reached 14.91 million yuan, the biggest pay packet among executives at Hunan’s listed companies that year.

Despite the army antecedents, Junxin is neither military-affiliated nor state-owned, but it has enjoyed access to government projects through its early push into waste management and strong ties with local authorities.

Hong Kong’s environmental protection sector has rebounded on equity markets this year. Shares of China Everbright Environment (0257.HK) are up 56% and Dynagreen Environmental Protection (1330.HK) has leapt 65% over the past 52 weeks. Both now trade at price-to-earnings multiples of roughly 9 to 10 times, below the 12 to 15 times that are typical for infrastructure or utility stocks.

If Junxin can continue to make headway overseas, its stable cash flow and domestic utility status could make an appealing proposition for investors.

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