Group 1: Natural Gas Business - The company achieved natural gas sales of 29.095 billion cubic meters, a year-on-year increase of 10.05% [1] - Revenue from natural gas sales reached RMB 80.078 billion, reflecting a year-on-year growth of 6.06% [1] - The company added 5 new city gas projects in Inner Mongolia, Shandong, and Guizhou, expanding its long-term development space [1] Group 2: Financial Performance - Total revenue for the first half of the year was RMB 97.543 billion, an increase of 4.97% year-on-year [1] - Shareholder profit attributable to the company was RMB 3.161 billion, a decrease of 4.36% compared to the previous year [1] - Earnings per share were 36.51 cents, with an interim dividend of 16.6 cents [1] Group 3: LPG and LNG Business - LPG sales reached 3.0684 million tons, a year-on-year increase of 4.87%, with revenue of RMB 13.020 billion, up 1.03% [2] - LNG processing and storage business generated revenue of RMB 4.371 billion, a decrease of 1.58% year-on-year, while pre-tax profit increased by 11.41% to RMB 1.836 billion [2]

Group 1: Natural Gas Business - Company achieved natural gas sales volume of 29.095 billion cubic meters, an increase of 10.05% year-on-year [1] - Revenue from natural gas sales reached RMB 80.078 billion, a year-on-year growth of 6.06% [1] - The number of new users added was 398,800, with a total user base of 16.8526 million [1] Group 2: Financial Performance - Total revenue for the company was RMB 97.543 billion, reflecting a year-on-year increase of 4.97% [1] - Shareholder profit attributable to the company was RMB 3.161 billion, a decrease of 4.36% year-on-year [1] - Earnings per share were 36.51 cents, with an interim dividend of 16.6 cents per share [1] Group 3: LPG and LNG Business - LPG sales volume reached 3.0684 million tons, a year-on-year increase of 4.87% [2] - Revenue from LPG was RMB 13.020 billion, showing a slight increase of 1.03% year-on-year [2] - LNG processing and storage business generated revenue of RMB 4.371 billion, a decrease of 1.58% year-on-year, while pre-tax profit increased by 11.41% to RMB 1.836 billion [2]

格隆汇8月19日丨昆仑能源(00135.HK)公布，2025年上半年，集团实现天然气销量290.95亿立方米，同 比增加26.57亿立方米或10.05%。集团实现收入人民币975.43亿元，同比增加人民币46.21亿元或4.97%； 除所得税前溢利人民币67.37亿元，同比减少人民币5.12亿元或7.06%；及公司股东应占溢利人民币31.61 亿元，同比减少人民币1.44亿元或4.36%。每股盈利（基本）为人民币36.51分。 董事会已向于2025年9月5日名列公司股东名册的股东宣派中期股息每股人民币16.60分（2024年：人民 币16.41分）或每股17.91港仙。 ...

免責聲明 | 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性或完整性亦不發表任何聲明，並明確表示，概不對因 | 公告全部或任何部份內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 | | --- | --- | | | 股票發行人現金股息（可選擇貨幣）公告 | | 發行人名稱 | 昆侖能源有限公司 | | 股份代號 | 00135 | | 多櫃檯股份代號及貨幣 | 不適用 | | 相關股份代號及名稱 | 不適用 | | 公告標題 | 截至2025年6月30日止六個月之中期股息 | | 公告日期 | 2025年8月19日 | | 公告狀態 | 新公告 | | 股息信息 | | | 股息類型 | 中期（半年期） | | 股息性質 | 普通股息 | | 財政年末 | 2025年12月31日 | | 宣派股息的報告期末 | 2025年6月30日 | | 宣派股息 | 每 股 0.166 RMB | | 股東批准日期 | 不適用 | | 香港過戶登記處相關信息 | | | 派息金額及公司預設派發貨幣 | 每 股 0.1791 HKD | | 匯率 | 1 RMB : 1.07 ...

[Financial Performance Summary](index=1&type=section&id=I.%20%E8%B2%A1%E5%8B%99%E6%A5%AD%E7%B8%BE%E6%91%98%E8%A6%81) This section provides a summary of key operational and financial indicators [Key Financial Indicators](index=1&type=section&id=1.1%20%E9%97%9C%E9%8D%B5%E8%B2%A1%E5%8B%99%E6%8C%87%E6%A8%99) This chapter summarizes key operational and financial indicators for the six months ended June 30, 2025, showing increased natural gas sales volume and revenue, but decreased profit before income tax and profit attributable to equity holders Key Financial Performance Summary for the Six Months Ended June 30 | Indicator | 2025 | 2024 | Change % | | :--- | :--- | :--- | :--- | | Total Natural Gas Sales Volume (million cubic meters) | 29,095 | 26,438 | 10.05 | | Natural Gas Retail Volume (million cubic meters) | 16,666 | 16,302 | 2.23 | | Revenue (RMB million) | 97,543 | 92,922 | 4.97 | | Profit Before Income Tax Expense (RMB million) | 6,737 | 7,249 | (7.06) | | Profit for the Period Attributable to Equity Holders (RMB million) | 3,161 | 3,305 | (4.36) | | Earnings Before Interest, Tax, Depreciation and Amortization (RMB million) | 9,523 | 9,915 | (3.95) | | Earnings Per Share (Basic) (RMB cents) | 36.51 | 38.17 | (4.35) | | Dividend Per Share - Interim (RMB cents) | 16.60 | 16.41 | 1.16 | [Unaudited Consolidated Interim Financial Statements](index=2&type=section&id=II.%20%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E7%B6%9C%E5%90%88%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) This section presents the unaudited consolidated interim financial statements [Unaudited Consolidated Interim Statement of Comprehensive Income](index=2&type=section&id=2.1%20%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E7%B6%9C%E5%90%88%E4%B8%AD%E6%9C%9F%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) This chapter details the unaudited consolidated interim statement of comprehensive income for the six months ended June 30, 2025, outlining revenue, expenses, profit before tax, income tax, and profit for the period, allocated to equity holders and non-controlling interests Unaudited Consolidated Interim Statement of Comprehensive Income (For the Six Months Ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Revenue | 97,543 | 92,922 | | Other income, net | 381 | 746 | | Interest income | 337 | 499 | | Purchases, services and others | (84,778) | (79,752) | | Employee compensation costs | (2,850) | (3,169) | | Depreciation, depletion and amortization | (2,800) | (2,754) | | Other selling, general and administrative expenses | (1,121) | (1,230) | | Taxes other than income tax | (216) | (239) | | Interest expense | (323) | (411) | | Share of profit less loss: associates | 294 | 335 | | Share of profit less loss: joint ventures | 270 | 302 | | Profit before income tax expense | 6,737 | 7,249 | | Income tax expense | (1,735) | (1,929) | | Profit for the period | 5,002 | 5,320 | | Profit for the period attributable to equity holders of the Company | 3,161 | 3,305 | | Profit for the period attributable to non-controlling interests | 1,841 | 2,015 | | Total comprehensive income attributable to equity holders of the Company | 3,145 | 3,218 | | Total comprehensive income attributable to non-controlling interests | 1,825 | 2,013 | [Unaudited Consolidated Interim Statement of Financial Position](index=4&type=section&id=2.2%20%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E7%B6%9C%E5%90%88%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) This chapter presents the unaudited consolidated interim statement of financial position as of June 30, 2025, and December 31, 2024, detailing non-current assets, current assets, equity, current liabilities, and non-current liabilities, reflecting changes in total assets and liabilities Unaudited Consolidated Interim Statement of Financial Position (As of June 30 and December 31) | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | **ASSETS** | | | | Total non-current assets | 84,376 | 86,153 | | Total current assets | 56,449 | 57,237 | | **TOTAL ASSETS** | **140,825** | **143,390** | | **EQUITY** | | | | Capital and reserves attributable to equity holders of the Company | 66,988 | 65,149 | | Non-controlling interests | 24,080 | 23,686 | | **TOTAL EQUITY** | **91,068** | **88,835** | | **LIABILITIES** | | | | Total current liabilities | 29,800 | 35,676 | | Total non-current liabilities | 19,957 | 18,879 | | **TOTAL LIABILITIES** | **49,757** | **54,555** | | **TOTAL EQUITY AND LIABILITIES** | **140,825** | **143,390** | | Net current assets | 26,649 | 21,561 | | Total assets less current liabilities | 111,025 | 107,714 | [Notes to the Unaudited Consolidated Interim Financial Information](index=6&type=section&id=III.%20%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E7%B6%9C%E5%90%88%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99%E9%99%84%E8%A8%BB) This section provides detailed notes to the unaudited consolidated interim financial information [Basis of Preparation and Accounting Policies](index=6&type=section&id=3.1%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96%E5%8F%8A%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96) This chapter explains the basis of preparation for the interim financial information, adhering to HKAS 34 and HKEX Listing Rules, noting that new and revised standards adopted this period, such as HKAS 21 amendments, had no significant impact on the Group's accounting policies - The Group's unaudited interim financial report is prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting' issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[9](index=9&type=chunk) - The Group first applied 'The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability – Amendments to HKAS 21' from **January 1, 2025**, but this amendment had no significant impact on the Group's accounting policies and required no retrospective adjustments[10](index=10&type=chunk)[11](index=11&type=chunk) [Segment Information](index=6&type=section&id=3.2%20%E6%9D%BF%E5%A1%8A%E8%B3%87%E6%96%99) This chapter details the Group's four operating segments by product and service: natural gas sales, LPG sales, LNG processing and storage, and exploration and production, providing revenue, results, and asset data for each segment to assess performance - The Group's business is divided into four operating segments: natural gas sales, LPG sales, LNG processing and storage, and exploration and production[13](index=13&type=chunk) Segment Revenue and Results for the Six Months Ended June 30, 2025 | Segment | Revenue from External Customers (RMB million) | Segment Results (RMB million) | Profit/(Loss) Before Income Tax Expense (RMB million) | | :--- | :--- | :--- | :--- | | Natural Gas Sales | 80,078 | 3,974 | 4,477 | | LPG Sales | 13,020 | 538 | 544 | | LNG Processing and Storage | 4,371 | 1,835 | 1,836 | | Exploration and Production | 74 | 18 | 61 | | Corporate Headquarters | – | (192) | (181) | | Total | 97,543 | 6,173 | 6,737 | Segment Revenue and Results for the Six Months Ended June 30, 2024 | Segment | Revenue from External Customers (RMB million) | Segment Results (RMB million) | Profit/(Loss) Before Income Tax Expense (RMB million) | | :--- | :--- | :--- | :--- | | Natural Gas Sales | 75,506 | 4,545 | 5,005 | | LPG Sales | 12,887 | 563 | 561 | | LNG Processing and Storage | 4,441 | 1,640 | 1,648 | | Exploration and Production | 88 | 14 | 174 | | Corporate Headquarters | – | (150) | (139) | | Total | 92,922 | 6,612 | 7,249 | [Revenue](index=9&type=section&id=3.3%20%E6%94%B6%E5%85%A5) This chapter clarifies that the Group's revenue primarily stems from natural gas sales, LPG sales, LNG processing and storage, and crude oil sales - Revenue primarily refers to income from natural gas sales, LPG sales, LNG processing and storage, and crude oil sales[19](index=19&type=chunk) [Interest Expense](index=9&type=section&id=3.4%20%E5%88%A9%E6%81%AF%E6%94%AF%E5%87%BA) This chapter discloses the composition of interest expense, including capitalized amounts, and notes a decrease in the average annual interest rate for capitalized borrowing costs during the period Interest Expense (For the Six Months Ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Interest expense | 339 | 426 | | Less: Capitalized amount | (16) | (15) | | Total interest expense | 323 | 411 | - The average annual interest rate used for capitalized borrowing costs during the period was **3.13%** (2024: 3.40%), showing a decrease[20](index=20&type=chunk) [Profit Before Income Tax Expense](index=9&type=section&id=3.5%20%E9%99%A4%E6%89%80%E5%BE%97%E7%A8%85%E8%B2%BB%E7%94%A8%E5%89%8D%E6%BA%A2%E5%88%A9) This chapter lists the expenses deducted from profit before income tax expense, including amortization of intangible assets, depreciation of property, plant and equipment, depreciation of right-of-use assets, cost of inventories, and impairment (reversal)/loss on trade receivables Items Deducted from Profit Before Income Tax Expense (For the Six Months Ended June 30) | Item | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Amortization of intangible assets | 40 | 42 | | Depreciation and depletion of: | | | | – Owned property, plant and equipment | 2,495 | 2,447 | | – Right-of-use assets | 265 | 265 | | Cost of inventories recognized as expense | 84,816 | 79,793 | | Impairment (reversal)/loss on trade receivables | (29) | 51 | [Income Tax Expense](index=10&type=section&id=3.6%20%E6%89%80%E5%BE%97%E7%A8%85%E8%B2%BB%E7%94%A8) This chapter explains the calculation of income tax expense, including the corporate income tax rate for PRC subsidiaries (primarily 25%, with 15%-20% preferential rates in some regions) and overseas profit tax rates, noting no Hong Kong profits tax provision for the period Income Tax Expense (For the Six Months Ended June 30) | Item | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Current tax: China | 1,728 | 1,847 | | Current tax: Overseas | 11 | 19 | | Deferred tax | (4) | 63 | | Total | 1,735 | 1,929 | - The PRC corporate income tax rate for the Group's subsidiaries in mainland China is primarily **25%**, with certain regions enjoying preferential tax rates ranging from **15% to 20%** for eligible operations[22](index=22&type=chunk) - No provision for Hong Kong profits tax was made for the period as the Group had no assessable profits subject to Hong Kong profits tax[23](index=23&type=chunk) [Basic and Diluted Earnings Per Share](index=10&type=section&id=3.7%20%E6%AF%8F%E8%82%A1%E5%9F%BA%E6%9C%AC%E5%8F%8A%E6%94%A4%E8%96%84%E7%9B%88%E5%88%A9) This chapter calculates basic earnings per share and states that diluted earnings per share are the same as basic earnings per share for the current period and the corresponding period in 2024, as there are no potential dilutive ordinary shares Basic Earnings Per Share (For the Six Months Ended June 30) | Indicator | 2025 (RMB cents) | 2024 (RMB cents) | | :--- | :--- | :--- | | Basic earnings per share | 36.51 | 38.17 | - Basic earnings per share is calculated based on profit attributable to equity holders of the Company of approximately **RMB 3,161 million** (2024: RMB 3,305 million) and the weighted average number of ordinary shares outstanding of approximately **8,659 million shares**[26](index=26&type=chunk) - Diluted earnings per share for the current period and the corresponding period in 2024 are the same as basic earnings per share, as there are no potential dilutive ordinary shares[26](index=26&type=chunk) [Dividends](index=11&type=section&id=3.8%20%E8%82%A1%E6%81%AF) This chapter lists the 2023 final dividend, 2024 final dividend, and the 2025 interim dividend declared by the Board, including per-share amounts, total amounts, and payment dates, noting shareholders' option to receive dividends in RMB or HKD Dividend Declaration Details | Dividend Type | Amount Per Share (RMB cents) | Total Amount (RMB million) | Approval Date | Payment Date | | :--- | :--- | :--- | :--- | :--- | | 2023 Final Dividend | 28.38 | 2,457 | 2024年5月30日 | 2024年7月18日 | | 2024 Final Dividend | 15.17 | 1,314 | 2025年5月29日 | 2025年7月18日 | | 2025 Interim Dividend | 16.60 | 1,437 | 2025年8月19日 | Expected October 23, 2025 | - Shareholders have the option to receive dividends in **RMB or HKD**[27](index=27&type=chunk) [Trade Receivables](index=11&type=section&id=3.9%20%E6%87%89%E6%94%B6%E8%B3%87%E6%AC%BE) This chapter provides an aging analysis of trade receivables (net of loss allowance) as of June 30, 2025, and December 31, 2024, and explains the collection periods for different businesses Aging Analysis of Trade Receivables (RMB million) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 3 months | 1,834 | 1,713 | | 3 to 6 months | 705 | 58 | | 6 to 12 months | 333 | 252 | | Over 12 months | 532 | 521 | | **Total** | **3,404** | **2,544** | - Revenue from receiving station services and crude oil sales is generally collected within **30 to 90 days** from the invoice date, while natural gas sales have a credit period not exceeding **90 days**[28](index=28&type=chunk) [Trade and Other Payables and Accrued Liabilities](index=12&type=section&id=3.10%20%E6%87%89%E4%BB%98%E8%B3%87%E6%AC%BE%E5%8F%8A%E6%87%89%E8%A8%88%E8%B2%A0%E5%82%B5) This chapter details the composition of trade and other payables and accrued liabilities as of June 30, 2025, and December 31, 2024, and provides an aging analysis of trade payables Trade and Other Payables and Accrued Liabilities (RMB million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade payables | 3,197 | 3,106 | | Contract liabilities | 10,671 | 12,690 | | Salaries and welfare payable | 852 | 326 | | Accrued expenses | 230 | 22 | | Dividends payable | 1,505 | 158 | | Interest payable | 154 | 137 | | Construction and equipment costs payable | 4,611 | 5,541 | | Amounts due to related parties | 2 | 2 | | Other payables | 3,136 | 3,242 | | **Total** | **24,358** | **25,224** | Aging Analysis of Trade Payables (RMB million) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 3 months | 2,575 | 2,576 | | 3 to 6 months | 251 | 116 | | Over 6 months | 371 | 414 | | **Total** | **3,197** | **3,106** | [Chairman's Report](index=13&type=section&id=IV.%20%E4%B8%BB%E5%B8%AD%E5%A0%B1%E5%91%8A) This section presents the Chairman's report on the Group's performance and outlook [Performance Overview](index=13&type=section&id=4.1%20%E6%A5%AD%E7%B8%BE%E6%A6%82%E8%A7%88) The Chairman's report begins with an overview of the Group's H1 2025 performance, showing growth in natural gas sales and revenue, but a decline in profit before income tax and net profit attributable to equity holders due to various factors H1 2025 Key Performance Overview (Year-on-Year) | Indicator | H1 2025 | Change % | | :--- | :--- | :--- | | Natural Gas Sales Volume | 29.095 billion cubic meters | +

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負責，對其準確性或完 整性亦不發表任何聲明，並明確表示概不就因本公告全部或任何部份內容而產生或因倚賴該等內容 而引致之任何損失承擔任何責任。 昆 侖 能 源 有 限 公 司 KUNLUN ENERGY COMPANY LIMITED (incorporated in Bermuda with limited liability) 有關轉讓於天津壓縮公司之股權的補充公告 於本公告日期，董事會成員包括劉國海先生為主席兼執行董事、錢治家先生為行政總裁兼執行董 事、呂菁女士及戚振忠先生為非執行董事，及辛定華先生、曾鈺成先生及郭志成先生為獨立非執行 董事。 現向股東提供有關天津壓縮公司截至估值日期之經審核資產淨值的進一步背景資料，有關評估乃由 本公司獨立估值師於2024年12月方始作出，而本公司此後一直在尋求合適的時間進行出售事項。本 公司獨立估值師確認，自估值日期起直至出售事項日期，天津壓縮公司之估值並無任何重大變動。 出售事項之財務影響 茲提述昆侖能源有限公司（「本公司」）日期為2025年7月23日有關出售事項之公告（「該公告」）。除非 本公告中另有 ...

格隆汇8月6日丨昆仑能源(00135.HK)宣布，公司将于2025年8月19日（星期二）举行董事会会议，藉以 （其中包括）考虑公司及其附属公司截至2025年6月30日止六个月的中期业绩，及考虑宣派股息（如 有）。 ...

茲通告昆侖能源有限公司（「本公司」）將於2025年8月19日（星期二）舉行董事會（「董事會」）會議，藉 以（其中包括）考慮本公司及其附屬公司截至2025年6月30日止六個月的中期業績，及考慮宣派股息 （如有）。 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負責，對其準確性或完 整性亦不發表任何聲明，並明確表示，概不就因本公告全部或任何部份內容而產生或因倚賴該等內 容而引致之任何損失承擔任何責任。 昆 侖 能 源 有 限 公 司 KUNLUN ENERGY COMPANY LIMITED (incorporated in Bermuda with limited liability) （股份代號：00135.HK） 董事會會議通告 承董事會命 昆侖能源有限公司 公司秘書 謝茂 香港，2025年8月6日 於本公告日期，董事會成員包括劉國海先生為主席兼執行董事、錢治家先生為行政總裁兼執行董 事、呂菁女士及戚振忠先生為非執行董事，及辛定華先生、曾鈺成先生及郭志成先生為獨立非執行 董事。 ...

Investment Rating - The report maintains a "Buy" rating for several companies in the power and gas sectors, including China Power, Huaneng International, and Kunlun Energy, among others [49][51]. Core Insights - The adjustment of capacity prices for coal and gas power plants in Guangdong is expected to improve profitability for gas power plants significantly, with capacity prices increasing by 65% to 296% depending on the type of gas plant [4][10]. - The rapid development of renewable energy installations in Guangdong has increased the reliance on coal power for flexible peak regulation, with renewable energy capacity reaching 59.13 million kW by the end of 2024, accounting for 26.6% of the total installed capacity [9][10]. - The report highlights the geopolitical factors affecting natural gas prices, with European gas prices experiencing a slight increase due to renewed geopolitical tensions, while U.S. gas prices remain stable [13][20]. Summary by Sections 1. Power Sector - Guangdong has raised the capacity price for coal power plants to 165 RMB per kW per year starting January 1, 2026, and for gas power plants, prices will range from 165 to 396 RMB per kW per year starting August 1, 2025 [8][10]. - The increase in capacity prices is expected to provide annual revenue boosts of 1.72 billion RMB for Guangdong Power A and 350 million RMB for Guangzhou Development [11]. 2. Gas Sector - As of August 1, 2025, the Henry Hub spot price is $3.00/mmBtu, while the TTF spot price in Europe is €32.95/MWh, reflecting a week-on-week increase of 2.74% [13][14]. - The report notes that the domestic LNG price is 4388 RMB per ton, showing a week-on-week decrease of 1.06% [32]. 3. Market Review - The gas sector outperformed the Shanghai and Shenzhen 300 index, while the public utility, power, and environmental sectors lagged behind [39]. 4. Company and Industry Dynamics - The National Energy Administration has released guidelines to enhance the management of natural gas pipeline transportation prices, promoting transparency and optimizing resource allocation [37]. - The report discusses the performance of key companies, including Huaneng International and Inner Mongolia Huadian, with varying revenue and profit trends [44].

Investment Rating - The report maintains an "Accumulate" rating for the environmental protection industry [1] Core Views - The report emphasizes the importance of the recent price law revision, which is expected to enhance ROE and cash flow, particularly in the water pricing sector. The marketization of water prices is seen as a potential turning point for cash flow, similar to the previous developments in waste incineration [1][11] - The report identifies a cash flow turning point in water operations, suggesting that companies like Xingrong and Shou Chuang will see significant reductions in capital expenditures starting in 2025, leading to substantial increases in free cash flow [1][22] - The report highlights the strengthening of environmental inspections as a driving force for the industry, indicating a shift from policy-driven to governance-driven demand for environmental services [10] Summary by Sections Industry Trends - The environmental protection industry is transitioning towards a governance-driven model, with a focus on long-term, systematic management rather than temporary fixes [10] - The report notes a significant increase in the sales of new energy sanitation vehicles, with a year-on-year growth of 90.56% in the first half of 2025, indicating a growing market for environmentally friendly equipment [31] Water Operations - The report predicts that the water operations sector will experience a cash flow turning point, with companies like Xingrong and Shou Chuang expected to reduce capital expenditures significantly starting in 2025, leading to increased free cash flow [1][22] - The report recommends companies such as Xingrong Environment, Yuehai Investment, and Hongcheng Environment for their strong dividend potential and market positioning [23][24] Waste Incineration - The report discusses the expected decline in capital expenditures for waste incineration, which will enhance free cash flow and dividend payouts. Companies like Junxin and Green Power are highlighted for their strong dividend performance [18][20] - The report identifies new trends in waste incineration, including partnerships with data centers to enhance profitability and ROE [21] Policy Developments - The report outlines the implications of the price law revision, which aims to enhance market pricing mechanisms and improve cash flow for public utilities, particularly in water and waste management sectors [11][14] - The report emphasizes the importance of environmental inspections in driving industry growth and ensuring compliance with new regulations [9][10] Recommendations - The report recommends a focus on companies with strong operational capabilities and cash flow potential, such as Xingrong Environment, Yuehai Investment, and Hongcheng Environment, while suggesting attention to emerging players in the waste management and renewable energy sectors [23][24][25]