China's Zhongke Environmental raises $150M in convertible bond to push waste-heat supply

What's the deal? Beijing-listed Zhongke Environmental Protection has completed a US$137.5M convertible bond issue, with proceeds funding four waste-to-energy and heat projects plus working capital and bank loan repayment. The subscription closed on October 16, 2026, under the ticker "中科转债."

What's the endgame? The company, part of the Chinese Academy of SciencesDealroom has a profile for this one. Try Dealroom → system, turns household, kitchen, and medical waste into power, heat, and fuel. Three of the four funded projects target heat supply, including a Shijiazhuang plant designed to produce 800,000 tonnes of industrial steam a year without any generating units.

Why now? China's waste incineration sector is shifting from building new capacity to squeezing more value from existing plants. New winning bids fell about 35% year on year in 2025 to roughly 5,900 tonnes a day, far below the 2018–2019 peak above 100,000 tonnes a day, while renewable power subsidies are being phased out.

The numbers: Zhongke reported 1.86 million tonnes of heat supplied in 2025, a heat-supply ratio of 40.63%. Dongwu Securities put the company's heat-supply share at 24% in 2025, well above the 6.7% industry average.

What could go wrong? Heat revenue depends heavily on location — nearby industrial demand, pipeline costs, and load matching all shape returns. Original shareholders took up roughly 81.9% of the issue, and converting the raise into project returns matters more than the headline figure.

The signal: Heat supply has moved from an add-on to the core revaluation logic for ageing incineration assets. As selling steam can fetch roughly 1.8 times the revenue of power generation, the easiest gains are already being competed away — leaving project selection and operating efficiency as the real test for operators chasing green-heat growth.

Read more: sohu.com

Image credit: jikatu