Investment Rating - Maintains an "Overweight" rating for the company [2] Core Views - The company's capital expenditure has significantly decreased, leading to a substantial year-on-year decline in BOT construction revenue, resulting in fluctuations in the 2024 interim performance [4] - Operations remain stable, with water treatment business volume and prices increasing [4] - High dividend payout ratio with stable dividend distribution [4] Financial Performance - 2024 H1 revenue: 11.309 billion RMB, down 6% year-on-year [4] - 2024 H1 net profit attributable to shareholders: 1.122 billion RMB, down 18% year-on-year [4] - Construction service revenue: 1.642 billion RMB, down 49% year-on-year [4] - Operating income from sewage and water supply services showed steady growth [4] Water Treatment Business - Total water treatment design capacity: 44 million tons/day as of H1 2024 [4] - Sewage: 24.84 million tons/day - Water supply: 14.34 million tons/day - Recycled water: 4.52 million tons/day - Seawater desalination: 0.3 million tons/day - Sewage treatment volume increased by 5% year-on-year [4] - Average sewage treatment contract price: 1.51 RMB/ton, slightly up from 1.49 RMB/ton in 2023 [4] - Sewage treatment gross margin improved by 2 percentage points to 59% [4] - Water supply volume increased by 4% year-on-year [4] - Average water supply contract price: 2.16 RMB/ton, slightly up from 2.15 RMB/ton in 2023 [4] - Water supply gross margin decreased by 4 percentage points to 43% [4] BOT Construction - BOT construction revenue: 1.258 billion RMB, down 57% year-on-year [4] - Focus on light-asset projects, reducing investment in BOT water projects [4] Capital Expenditure and Dividends - 2024 H1 capital expenditure: 1.573 billion RMB, significantly down from 3.618 billion RMB in the same period last year [4] - Interim dividend: 0.07 HKD per share, same as last year, with a cash dividend payout ratio of 60% [4] - Trailing twelve-month (TTM) dividend yield: 7.04% [4] Market Data - Current price: 2.23 HKD [5] - 52-week price range: 1.50-2.78 HKD [5] - Current shares outstanding: 10,047 million [5] - Current market capitalization: 22,404 million HKD [5] Financial Forecast - 2024-2026 forecasted net profit: 1.966 billion, 2.040 billion, and 2.150 billion RMB respectively [4] - 2024-2026 forecasted EPS: 0.20, 0.20, and 0.21 RMB respectively [4]

Financial Performance - For the six months ended June 30, 2024, the company's profit attributable to shareholders decreased by 18% to RMB 1,122,100,000 from RMB 1,369,800,000 in the previous period[3]. - EBITDA for the same period was RMB 4,659,700,000, a decrease of 1.5% compared to RMB 4,728,900,000 in the prior period[3]. - Total revenue for the six months was RMB 11,308,811,000, down from RMB 12,083,093,000 in the previous year, representing a decrease of approximately 6.4%[4]. - Gross profit for the period was RMB 4,293,515,000, compared to RMB 4,430,529,000 in the previous year, reflecting a decline of about 3.1%[4]. - The company's operating profit was RMB 3,451,663,000, down from RMB 3,714,404,000, indicating a decrease of approximately 7.1%[4]. - The pre-tax profit for the period was RMB 2,210,823,000, compared to RMB 2,509,514,000 in the previous year, a decline of about 11.9%[4]. - The total comprehensive income for the period was RMB 1,261,091,000, significantly up from RMB 196,109,000 in the previous year[5]. - The net profit attributable to shareholders for the six months ended June 30, 2024, was RMB 1,122,088,000, down from RMB 1,369,754,000 in the same period of 2023, representing a decrease of 18.1%[20]. - The company's net profit attributable to shareholders decreased by 18% to RMB 1,122.1 million due to a reduction in revenue from BOT water service construction projects[45]. - Total operating revenue for the period fell by 6% to RMB 11,308.8 million[45]. Dividends and Shareholder Returns - The company proposed an interim dividend of HKD 0.07 per share, with a payout ratio of 60%[3]. - The interim cash dividend declared is HKD 0.07 per ordinary share, totaling approximately RMB 642,942,000, slightly up from RMB 632,936,000 for the same period last year[31]. - The company declared an interim dividend of HKD 0.07 per share, equivalent to RMB 0.063996 per share, to be paid on October 28, 2024[136]. - Shareholders have the option to receive the interim dividend in RMB, with a deadline for currency choice submission by October 7, 2024[138]. Assets and Liabilities - Non-current assets totaled RMB 125,321,744,000 as of June 30, 2024, compared to RMB 125,108,357,000 at the end of the previous year[7]. - Current assets decreased to RMB 39,999,825,000 from RMB 40,384,836,000, indicating a decline of approximately 1%[7]. - As of June 30, 2024, total equity reached RMB 55,755.629 million, an increase from RMB 54,133.475 million as of December 31, 2023, reflecting a growth of approximately 3%[8]. - The company reported total liabilities of RMB 109,565.940 million, a decrease from RMB 111,359.718 million, indicating a reduction of about 1.6%[8]. - Non-current liabilities amounted to RMB 64,692.572 million, down from RMB 68,861.047 million, representing a decline of approximately 6.3%[8]. - Current liabilities increased to RMB 44,873.368 million from RMB 42,498.671 million, marking an increase of about 5.6%[8]. - The company's total assets as of June 30, 2024, were RMB 120,448.2 million, slightly down from RMB 122,994.5 million at the end of 2023[43]. - Cash and cash equivalents decreased to RMB 8,953,700,000 as of June 30, 2024, down from RMB 10,215,200,000 as of December 31, 2023[117]. - Total borrowings amounted to RMB 73,853,100,000, slightly down from RMB 74,244,700,000 as of December 31, 2023, with bank borrowings at RMB 59,880,500,000[117]. Revenue Sources - The revenue from wastewater and recycled water treatment services for the six months ended June 30, 2024, was RMB 4,384,504,000, an increase of 4.4% from RMB 4,200,741,000 in 2023[24]. - The revenue from construction services decreased significantly to RMB 1,641,703,000 in 2024 from RMB 3,227,715,000 in 2023, a decline of 49.2%[24]. - The total revenue from external customers in mainland China was RMB 10,656,369,000 for the six months ended June 30, 2024, down from RMB 11,450,794,000 in 2023, a decline of 6.9%[22]. - The revenue from water treatment services in China was RMB 4,176.7 million, contributing to a gross profit margin of 59%[46]. - The total revenue from BOT water projects amounted to RMB 1,257,600,000 for the period, a decrease from RMB 2,903,900,000 in the same period last year, with attributable profit to shareholders at RMB 159,200,000, down from RMB 374,600,000[75]. - Revenue from technical services and equipment sales was RMB 1,151,400,000, an increase from RMB 1,051,600,000 year-on-year, contributing 10% to total revenue, while attributable profit decreased to RMB 108,700,000 from RMB 189,000,000[76]. Operational Capacity and Projects - The total daily design capacity of the company's water treatment facilities reached 44,000,174 tons as of June 30, 2024, with 1,457 water plants and sewage treatment facilities in operation[55]. - The company established service concession agreements for multiple township sewage treatment projects, with a total processing capacity of 24,500 tons per day[56]. - The company has expanded its coverage to 20 provinces, 5 autonomous regions, and 4 municipalities in mainland China[54]. - The company operates 1,194 water treatment facilities with a total design capacity of 33,610,847 tons per day, achieving a total processing volume of 4,198,100,000 tons during the period[61]. - The company has 334 wastewater treatment facilities in southern China, with a total design capacity of 4,605,005 tons per day, and recorded a processing volume of 706,200,000 tons[62]. - In the western region of China, the company operates 323 facilities with a design capacity of 2,844,810 tons per day, achieving a processing volume of 399,400,000 tons and revenue of RMB 783,600,000[64]. - The eastern region's facilities increased their design capacity to 5,886,876 tons per day, processing 820,100,000 tons and generating RMB 974,800,000 in revenue[66]. - The company is currently constructing 10 integrated governance projects, with revenue from these projects increasing to RMB 384,100,000 during the period[73]. Cost Management and Expenses - The financial expenses for the six months ended June 30, 2024, totaled RMB 1,565,644,000, slightly increased from RMB 1,542,598,000 in the same period of 2023[27]. - Management expenses decreased to RMB 1,251,700,000, a slight decline of 3% from RMB 1,288,300,000, indicating effective cost control[91]. - Finance costs increased to RMB 1,395,000,000 from RMB 1,314,100,000, primarily due to a slight rise in average interest rates[93]. Corporate Governance and Shareholder Engagement - The company has committed to maintaining high standards of corporate governance to enhance transparency and protect shareholder rights[142]. - The audit committee, consisting of three independent non-executive directors, reviewed and approved the unaudited interim results for the six months ended June 30, 2024[144]. - The interim results announcement will be published on the company's website and the Hong Kong Stock Exchange website[146]. - The company expresses gratitude to all employees for their support and dedication[147].

Financial Performance - For the year ended December 31, 2023, the company achieved a total revenue of RMB 24,519,374,000, representing a year-on-year increase of 14.1%[7] - The company reported a net profit attributable to shareholders of RMB 1,895,681,000, which is a significant increase of 60.5% compared to the previous year[7] - The basic earnings per share for the year were RMB 0.1824[7] - Total operating revenue rose by 14% to RMB 24,519.4 million, with significant contributions from both domestic and overseas water treatment services[14] - The company's net profit attributable to shareholders increased by 60% to RMB 1,895.7 million, driven by increased revenue from water treatment services and the consolidation of Beikong Urban Resources Group since the second half of last year[14] - The group reported a gross profit margin of 47% and a net profit margin of 72% for the year, indicating strong operational efficiency[15] - The gross profit margin improved to 26% in 2023, up from 16% in 2022, indicating a significant enhancement in profitability[26] - The financial expenses for the year totaled RMB 3,260.9 million, impacting overall profitability[16] - The company reported a loss of RMB 938.3 million from the disposal of an associate company, which affected the overall financial performance[21] Operational Capacity and Projects - The company added a new design capacity of 1,548,909 tons per day, bringing the total design capacity to 43,963,124 tons per day as of December 31, 2023[7] - The total daily design capacity of the group's water treatment facilities reached 43,963,124 tons as of December 31, 2023, with operational facilities accounting for 31,606,503 tons[28] - The average daily processing volume for wastewater treatment was 16,405,750 tons, with an average processing rate of 79%[30] - The group established service concession arrangements for a total daily design capacity of 1,548,909 tons during the year, including various BOT, TOT, and BOO projects[27] - The group operates 1,455 water treatment and sewage treatment facilities, including 934 sewage treatment plants and 42 reclaimed water treatment plants in mainland China[29] Strategic Focus and Initiatives - The company is focusing on green and low-carbon transformation in response to national environmental policies, aiming to enhance asset quality and operational efficiency[8] - The company aims to maintain its industry-leading position through technological and management innovations[8] - The company is committed to supporting the construction of a beautiful China by optimizing wastewater management and enhancing water supply operations[8] - The company emphasizes cash flow as a core strategy while enhancing business fundamentals and focusing on customer management and business transformation[7] - The group is focusing on digital capabilities in core business areas, implementing a digital management platform for wastewater treatment plants[12] Shareholder Returns and Dividends - The board of directors declared a final cash dividend of HKD 0.087 per share to reward shareholders for their continued support[7] - The company reported a proposed final dividend of HKD 0.087 per share, following an interim dividend of HKD 0.070 per share distributed on October 19, 2023[140] - The board will consider various factors before declaring dividends, including the group's financial performance, retained earnings, and future expansion plans[108] Governance and Board Composition - The board of directors consists of 9 members, including 4 executive directors and 5 non-executive directors, ensuring compliance with the listing rules[72] - The company appointed Chen Zhao Shi as an independent non-executive director on September 15, 2023, to comply with listing rules regarding board composition[74] - The company has implemented continuous professional development training for directors to enhance their knowledge and skills in corporate governance[76] - The company has established a succession plan for the board, regularly reviewing and identifying suitable candidates with diverse skills[84] - The company’s board is responsible for formulating corporate strategies and overseeing financial performance to achieve strategic goals[75] Risk Management and Compliance - The risk management framework is structured as "three levels + three lines of defense," ensuring effective risk management and internal control systems[101] - The company has implemented a whistleblowing policy to allow employees and stakeholders to report potential misconduct confidentially[105] - The audit committee continuously monitors the effectiveness of the risk management and internal control systems and reports annually to the board[104] - The company has established a comprehensive procedure for handling insider information to ensure compliance with disclosure regulations[106] Employee and Workforce Management - The total employee cost for the year was RMB 5,330,504,000, compared to RMB 4,487,697,000 for the previous year, reflecting an increase in workforce to 76,608 employees[66] - The company provides competitive compensation and benefits to employees based on their merits and performance[96] - The gender ratio among employees is approximately 55% male and 45% female, indicating satisfactory gender diversity within the workforce[83] Financial Instruments and Capital Management - The company has issued medium-term notes with an outstanding principal amount of RMB 2,000,000,000, maturing in January 2026 and January 2029, with annual interest rates of 3.95% and 4.49% respectively[147] - The company has issued bonds with an outstanding principal amount of RMB 1,500,000,000, maturing in April 2029, with an annual interest rate of 3.98%[148] - The total available reserves for distribution to shareholders as of December 31, 2023, amount to RMB 5,156,220,000[152] - The company has a cumulative daily deposit balance limit of HKD 1,520,000,000 under the 2021 deposit service agreement with Beikong Group Finance[194] Market Presence and Expansion Plans - The company plans to expand its market presence and invest in new technologies to enhance service offerings and operational efficiency[16] - The group plans to continue expanding its water treatment services across 20 provinces, 5 autonomous regions, and 4 municipalities in mainland China[27] Environmental and Social Responsibility - The company is committed to environmental sustainability and has established policies to ensure efficient resource utilization[97] - The company is focused on sustainable development and has established a Sustainable Development Committee to oversee its initiatives in this area[128] Communication with Shareholders - The company emphasizes effective communication with shareholders through various channels, including interim and annual reports, investor meetings, and social media updates[114] - The company has established procedures for shareholders to propose resolutions at annual general meetings[112] - The company actively communicated with shareholders through various channels, including the annual general meeting and online platforms, to enhance transparency and provide updates on the group's latest developments[116]

Investment Rating - The report maintains an "Add" rating for the company [2] Core Views - The company reported a 14.1% year-on-year increase in revenue for 2023, reaching 24.52 billion RMB, and a 60.5% increase in net profit attributable to shareholders, totaling 1.90 billion RMB [2] - The company plans to distribute a final dividend of 0.087 HKD per share, with a total payout ratio of 75% for the year [2] - The report anticipates that the company may exceed its performance guidance due to the flexibility in profit margins from water price increases and adjustments in overseas debt structure [2] Financial Summary - Revenue for 2023 was 24,519 million RMB, with a projected growth of 5.2%, 4.3%, and 4.8% for 2024, 2025, and 2026 respectively [3] - Net profit attributable to shareholders for 2023 was 1,896 million RMB, with expected growth rates of 6.6%, 10.3%, and 11.9% for the following three years [3] - The EBITDA margin improved by 3.2 percentage points to 36.4% in 2023 [2] - The company’s total assets were reported at 165.5 billion RMB, with net assets of 31.4 billion RMB [4]

Investment Rating - Maintains an "Overweight" rating [1][3] Core Views - The company is the leading water treatment industry player in China with the largest capacity scale [1] - The sewage and water supply businesses are growing steadily, with increasing volumes and prices [1] - Capital expenditure is entering a downward cycle, improving cash flow and supporting stable high dividends [1] - The company is expected to undergo a revaluation due to its high dividend characteristics [1] Financial Performance - 2023 revenue reached RMB 24.519 billion, a 14% year-on-year increase [1] - 2023 net profit attributable to shareholders was RMB 1.896 billion, a 60% year-on-year increase [1] - The company changed its financial reporting currency from HKD to RMB starting from January 1, 2023 [1] - The consolidated gross margin in 2023 was 36.7%, a 2.7 percentage point decrease compared to the previous year, mainly due to the consolidation of Beijing Enterprises Urban Resources Group [1] Business Operations - Total water treatment capacity reached 43.96 million tons/day by the end of 2023, including 24.86 million tons/day for sewage, 14.33 million tons/day for water supply, 4.47 million tons/day for recycled water, and 0.30 million tons/day for seawater desalination [1] - In 2023, the company treated 6.03 billion tons of sewage and recycled water, a 4% year-on-year increase [1] - The average contract price for sewage treatment in mainland China was RMB 1.49/ton in 2023, compared to RMB 1.47/ton in 2022 [1] - Water supply volume reached 2.31 billion tons, a 4% year-on-year increase, with an average contract price of RMB 2.15/ton in mainland China, compared to RMB 2.13/ton in 2022 [1] - Capital expenditure in 2023 was RMB 6.83 billion, slightly higher than the RMB 6.30 billion in 2022, mainly due to the recovery from the impact of the pandemic on water plant construction in 2022 [1] Dividend Policy - The total dividend for 2023 was RMB 1.42 billion, a 1.68% year-on-year increase, with a cash dividend payout ratio of 75% [1] - The company has maintained a stable annual dividend of approximately HKD 1.58 billion for three consecutive years from 2021 to 2023 [1] - The static dividend yield for 2023 was 8.83%, highlighting the company's high dividend characteristics [1] Financial Forecasts - The forecasted net profits for 2024-2026 are adjusted to RMB 1.966 billion (-10%), RMB 2.040 billion (-12%), and RMB 2.150 billion, respectively [1] - The corresponding EPS for 2024-2026 are RMB 0.20, RMB 0.20, and RMB 0.21, respectively [1]

Financial Performance - For the year ended December 31, 2023, the profit attributable to shareholders increased by 60% to RMB 1,895,700,000 from RMB 1,181,400,000 in the previous year[3]. - EBITDA for the year was RMB 8,931,300,000, a 25% increase from RMB 7,158,200,000 last year[3]. - The total revenue for the year was RMB 24,519,374,000, up from RMB 21,484,840,000, representing a growth of approximately 9.5%[4]. - The basic and diluted earnings per share for the year were RMB 18.24 and RMB 18.21, respectively, compared to RMB 11.33 and RMB 11.31 in the previous year[4]. - The company reported a net profit of RMB 3,064,327,000 for the year, compared to RMB 2,335,171,000 in the previous year[5]. - The company reported a pre-tax profit of RMB 4,028,439,000 for the year ended December 31, 2023, compared to RMB 3,265,457,000 for the year ended December 31, 2022[25][32]. - The company's net profit attributable to shareholders for 2023 was RMB 1,895,681,000, a significant increase of 60.5% compared to RMB 1,181,430,000 in 2022[35]. - The total proposed final dividend for 2023 is RMB 1,419,586,000, slightly up from RMB 1,396,137,000 in 2022, maintaining the same per share dividend of 8.7 HKD cents[33]. Assets and Liabilities - The total assets as of December 31, 2023, amounted to RMB 165,493,193,000, an increase from RMB 161,751,644,000 in the previous year[7]. - The company’s total non-current assets increased to RMB 125,108,357,000 from RMB 120,756,110,000 year-on-year[7]. - As of December 31, 2023, total equity reached RMB 54,133,475,000, an increase of 3.7% from RMB 52,207,300,000 in 2022[8]. - Non-current liabilities totaled RMB 68,861,047,000, up 6.1% from RMB 64,892,125,000 in the previous year[8]. - Current liabilities decreased to RMB 42,498,671,000, down 4.8% from RMB 44,652,219,000 in 2022[8]. - Total liabilities amounted to RMB 111,359,718,000, reflecting a 1.7% increase from RMB 109,544,344,000 in 2022[8]. - The company reported a net current liability of RMB 2,000,000,000 and capital commitments of approximately RMB 18,100,000,000 as of December 31, 2023[9]. - The company’s total borrowings rose to RMB 74,244,700,000 in 2023 from RMB 72,243,900,000 in 2022, reflecting an increase of approximately 2.8%[117]. Revenue Breakdown - The total operating revenue for the year ended December 31, 2023, was RMB 24,519,374,000, representing an increase of 14.5% compared to RMB 21,484,840,000 for the year ended December 31, 2022[25][27]. - Revenue from wastewater and recycled water treatment services was RMB 8,643,409,000 for the year ended December 31, 2023, compared to RMB 8,491,352,000 in the previous year[29]. - The company’s revenue from mainland China was RMB 23,159,277,000, up from RMB 20,155,038,000 in the previous year[27]. - The revenue from urban resource services surged by 131% to RMB 5,057.6 million in 2023, compared to RMB 2,184.9 million in 2022[57]. - The company’s total revenue from technical services and equipment sales decreased by 16% to RMB 2,459.1 million in 2023[57]. Expenses and Costs - The financial expenses for the year ended December 31, 2023, totaled RMB 3,260,857,000, an increase from RMB 2,745,678,000 in the previous year[31]. - The total sales cost for the year ended December 31, 2023, was RMB 15,518,621,000, compared to RMB 13,024,158,000 in the previous year[25][26]. - Management expenses increased to RMB 3,317,400,000 from RMB 2,973,300,000, primarily due to the consolidation of North Control Urban Resources[92]. - Other expenses, including headquarters costs and financial expenses, totaled RMB 3,260,900,000[51]. Cash Flow and Investments - The cash and cash equivalents decreased to RMB 10,215,161,000 from RMB 11,584,201,000 year-on-year[7]. - The company reported a total tax expense of RMB 964,112,000 for 2023, compared to RMB 930,286,000 in 2022, reflecting an increase of 3.6%[33]. - The total capital expenditure for the year amounted to RMB 6,834,800,000, an increase from RMB 6,299,400,000 as of December 31, 2022[119]. - The company issued perpetual capital instruments amounting to RMB 2,000,000,000 during the year, contributing to the increase in equity instruments[110]. Strategic Developments - The company has integrated the concept of "Future New Water Services" into its strategic development, focusing on sustainable innovation and technology[120]. - The company plans to continue expanding its market presence and developing new technologies in the water treatment sector[48]. - The company aims to lead asset-light transformation through a "Technology Development Platform" in 2024[122]. - The company plans to distribute a final dividend of HKD 0.087 per share, pending approval at the annual general meeting on June 5, 2024[129]. Corporate Governance - The company has adhered to all corporate governance codes as per the listing rules for the year ending December 31, 2023[132]. - The audit committee, composed of three independent non-executive directors, has reviewed and approved the financial results for the year ending December 31, 2023[134].

Financial Performance - The company achieved a total revenue of HKD 13,730,787,000 for the six months ended June 30, 2023, representing a year-on-year increase of 29%[10]. - The net profit attributable to shareholders reached HKD 1,556,538,000, marking a significant year-on-year increase of 124%[10]. - Operating revenue rose by 29% to HKD 13,730,800,000, driven by contributions from BOT water service projects and the consolidation of North Control Urban Resources Group[27]. - The group's total revenue for the period reached HKD 13,730.8 million, with a gross profit margin of 27% and attributable profit of HKD 3,793.9 million[29]. - The company reported a significant increase in attributable profit from joint ventures and associates, amounting to HKD 81.1 million[30]. - The company's net profit attributable to shareholders for the six months was HKD 1,556,538 thousand, compared to HKD 694,029 thousand in 2022, representing a 124.8% increase[118]. - Basic earnings per share increased to HKD 0.1531 from HKD 0.0664, reflecting a growth of 130.4%[118]. - The gross profit margin for wastewater and reclaimed water treatment services decreased to 57% from 60%, while the gross profit margin for overseas subsidiaries dropped to 16% from 23%[36]. Dividends and Shareholder Returns - The company declared an interim cash dividend of HKD 0.07 per share to reward shareholders for their continued support[10]. - The company’s cash dividends paid for the year-end 2022 amounted to HKD 874,055,000[123]. Operational Capacity and Projects - The total design capacity increased to 43,810,385 tons per day, with a new design scale of 534,672 tons per day added during the reporting period[10]. - The group operates a total of 1,447 water plants and township sewage treatment facilities, with a total daily design capacity of 43,810,385 tons as of June 30, 2023[42]. - The company is actively developing a new collaborative development model that includes municipal wastewater and integrated water supply networks[10]. - The group has established service concession arrangements for several township sewage treatment projects, with a total processing capacity of 13,000 tons per day[43]. Acquisitions and Investments - The company completed the acquisition of 100% equity in Honghe Water Industry Investment Co., Ltd. and Water Wealth County Water Industry Investment Co., Ltd. in Yunnan Province[11]. - The group did not have any significant investments or acquisitions during the six months ended June 30, 2023[112]. Financial Position and Liabilities - Total liabilities as of June 30, 2023, were HKD 9,948,277,000, a decrease from HKD 11,345,842,000 as of December 31, 2022, representing a reduction of approximately 12.3%[170]. - The debt-to-equity ratio increased to 1.24 as of June 30, 2023, from 1.16 as of December 31, 2022, primarily due to increased borrowings and decreased equity[108]. - Financial expenses increased from HKD 1,010,500,000 to HKD 1,493,300,000 due to higher average borrowing balances and interest rates[78]. Cash Flow and Financial Management - For the six months ended June 30, 2023, the company reported a net cash flow from operating activities of negative HKD 441,259,000, a significant decrease compared to HKD 750,362,000 for the same period in 2022[127]. - The company reported a decrease in cash flow from investing activities, totaling negative HKD 849,895,000 for the first half of 2023, compared to negative HKD 950,043,000 in the same period of 2022[127]. - The net increase in cash and cash equivalents for the first half of 2023 was HKD 1,085,765,000, down from HKD 3,866,483,000 in the same period of 2022[129]. Market Expansion and Strategy - The company is focused on sustainable development, integrating it into its long-term strategy to ensure high-quality and sustainable growth[20]. - The group is actively pursuing market expansion and innovation to create new growth points in its business[20]. - The company is committed to becoming a world-class water environment service provider, emphasizing green and sustainable development[24]. Technical and Operational Improvements - The company is implementing technical upgrades at the Zhucheng Wastewater Treatment Plant to ensure stable operations following its acquisition[11]. - The group successfully implemented new technologies, including the BEAOA and BEAMX processes, enhancing its core technical reserves[20]. - The group aims to enhance operational efficiency through digitalization and the optimization of its management systems[23]. Regional Performance - Revenue from mainland China was HKD 13,012,265,000, a significant increase from HKD 9,926,751,000 in the prior year[145]. - The actual processing volume in the southern region of China was 675,900,000 tons, generating revenue of 989,500,000 HKD and a profit attributable to shareholders of 375,700,000 HKD[48]. - The western region of China recorded a processing volume of 358,600,000 tons, with revenue of 911,300,000 HKD and a profit attributable to shareholders of 458,500,000 HKD[50]. Employee and Operational Costs - The total employee cost for the six months ended June 30, 2023, was HKD 2,846,122,000, significantly higher than HKD 1,623,328,000 for the same period last year[111]. - Management expenses increased to HKD 1,464,000,000 from HKD 1,326,100,000, primarily due to the consolidation of North Control Urban Resources[76]. Taxation and Compliance - Income tax expense included current tax of HKD 404,400,000, with an effective tax rate of approximately 17%, lower than the standard rate of 25%[82]. - The total tax expense for the period was HKD 627,122,000, compared to HKD 535,408,000 in the same period last year, reflecting a 17.1% increase[155].

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佈的內容概不負責， 對其準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公佈全部或任何 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。 （於百慕達註冊成立之有限公司） 371 （股份代號： ） 截至二零二三年六月三十日止六個月之 中期業績公佈 摘要 • 截至二零二三年六月三十日止六個月，本公司股東應佔溢利較上一期間之 694,000,000 124% 1,556,500,000 港元增加 至 港元。 • 5,373,800,000 3,811,800,000 除息稅折舊攤銷前溢利為 港元，較上一期間之 港元 41% 增加 。 • 15.31 15.28 期內每股基本及攤薄盈利分別為 港仙及 港仙。 • 7.0 截至二零二三年六月三十日止六個月，本集團建議派發中期股息每股 港 46% ...

Financial Performance - For the year ended December 31, 2022, the total design capacity reached 44,287,093 tons/day, with operating revenue of HKD 24,982,372,000, a decrease of 10% year-on-year [7]. - The net profit attributable to shareholders was HKD 1,374,151,000, representing a year-on-year decrease of 67%, with basic earnings per share of HKD 0.1318 [7]. - The company's profit attributable to shareholders decreased by 67% to HKD 1,374,200,000 due to a 10% decline in revenue from water environment governance construction services, totaling HKD 24,982,400,000 [17]. - The company reported a total revenue of HKD 27,880.1 million for the year, with a profit of HKD 8,321.5 million [22]. - The total revenue from the company's main business segments was HKD 24,982.4 million, a decrease of 10% from HKD 27,880.1 million in 2021 [27]. - The company expressed gratitude to shareholders, customers, employees, and partners for their continued support [16]. Revenue Sources - Revenue from wastewater and reclaimed water treatment services in mainland China grew by over 20% [7]. - Revenue from wastewater and reclaimed water treatment services in China reached HKD 9,388.3 million, contributing 38% to total revenue, with a gross margin of 57% [18]. - The overseas wastewater treatment services generated revenue of HKD 4,229.7 million, with a gross margin of 57% [18]. - The construction of BOT water projects contributed HKD 4,626.1 million in revenue, with an 18% gross margin [19]. - Revenue from comprehensive governance projects decreased by HKD 1,612,500,000 to HKD 1,458,900,000, compared to HKD 3,071,400,000 last year [41]. - Revenue from BOT water projects was HKD 4,626,100,000, a significant decline from HKD 9,533,200,000 in the previous year, with attributable profit decreasing to HKD 617,300,000 from HKD 1,191,800,000 [43]. Operational Efficiency and Strategy - The company aims to enhance operational efficiency and cash flow while promoting a light asset transformation [6]. - The company is focusing on strategic clarity, integrating municipal wastewater, water supply, reclaimed water, and sludge business as part of its asset acquisition strategy [7]. - The company aims to enhance operational efficiency and achieve high-quality, sustainable development, aligning with the national "3060" dual carbon strategy [16]. - The company plans to leverage technology and model innovation to create new growth points in business [16]. - The group established 58 regional companies and organizations to enhance customer service and trust, achieving a new signed water volume of 3,414,442 tons per day [9]. - The group is cultivating new growth points in its business through multi-track development strategies [7]. Environmental and Social Responsibility - The environmental industry is expected to experience high-quality growth, aligning with the "14th Five-Year Plan" and carbon neutrality goals [7]. - The company emphasizes social responsibility by ensuring personnel and production safety, maintaining stable water supply standards [7]. - The company is committed to becoming a trusted, leading global water environment service provider [16]. Governance and Board Structure - The board consists of a diverse group of members, including executive, non-executive, and independent directors, ensuring a range of expertise and governance [75]. - The board aims to avoid a single-gender composition and has appointed a female executive director since January 3, 2020 [85]. - The board's diversity policy was adopted in 2013 to enhance governance and maintain competitive advantage [84]. - The company has established a succession plan for the board, regularly reviewing and discussing it to identify suitable candidates with diverse skills [88]. - The audit committee, composed of three independent non-executive directors, is responsible for reviewing the company's financial statements and overseeing risk management and internal controls [92]. Risk Management - The company has adopted a risk management framework based on the "three lines of defense" model, which includes business units, risk management department, and audit department [102]. - The risk management department identified potential risks affecting financial, operational, and compliance objectives, including regulatory and market competition risks [104]. - The board of directors is responsible for assessing the nature and extent of risks faced by the group and ensuring effective risk management and internal control systems [100]. Shareholder Engagement - The company is committed to regular communication with shareholders through various channels, including interim and annual reports, and investor meetings [113]. - The company encourages shareholder proposals at annual or special meetings, requiring proper notice to be submitted within specified timeframes [112]. - The board believes that effective investor relations play a crucial role in creating shareholder value, enhancing company transparency, and building market confidence [114]. Future Outlook and Growth Initiatives - The company provided a positive outlook for the upcoming fiscal year, projecting a revenue growth of 12% to 15% [128]. - New product development initiatives are underway, with an investment of 5 million allocated for research and development in innovative water management technologies [128]. - The company plans to expand its market presence by entering three new regional markets by the end of 2023 [128]. - A strategic acquisition is in progress, targeting a company with an estimated value of 20 million, expected to enhance operational capabilities [128]. - The management team emphasized the importance of sustainability, aiming for a 25% reduction in carbon emissions by 2025 [128].

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佈的內容概不負責， 對其準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公佈全部或任何 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。 （於百慕達註冊成立之有限公司） 371 （股份代號： ） 截至二零二二年十二月三十一日止年度之 末期業績 及 建議修訂公司細則 摘要 • 截至二零二二年十二月三十一日止年度，本公司股東應佔溢利減少至 1,374,200,000 (1) 港元，主要由於： 視作出售一間聯營公司山高新能源集團有 1,091,000,000 限公司（前稱「北控清潔能源集團有限公司」）之虧損 港元（分類為 其他經營費用）（去年：無）。視作出售虧損乃一次性，屬非現金性質，對本集 (2) 團之現金流概無任何影響； 本集團已停止於水環境綜合治理項目之投資。 此外，多個建造項目及其相關業務於年內僅能維持有限度運作。故此，水環 境治理建造服務純利減少。 • ...