Group 1: Market Developments - Hong Kong Stock Exchange will lower the minimum price fluctuation for stocks starting August 4, 2025, following successful market rehearsals and regulatory approvals [1] - The Hang Seng Index's ADR closed at 24,987.99 points, down 6.15 points or 0.02% [3] Group 2: Index Adjustments - The Hang Seng Index announced changes to the calculation method of the Hang Seng Hong Kong Stock Connect Innovative Drug Selection Index, effective from the index review on June 30, 2025 [2] Group 3: Company Earnings - Cathay Pacific reported a 23.3% year-on-year increase in passenger numbers, carrying approximately 2.9 million passengers in June 2025 [8] - China Longgong expects a significant increase in net profit for the first half of 2025, estimated between RMB 590 million and RMB 665 million, representing a year-on-year increase of 29% to 45% [11] - Meitu Company anticipates a 65% to 72% year-on-year growth in adjusted net profit for the first half of 2025 [10] - Hengtou Securities expects a net profit of approximately RMB 239 million for the first half of 2025, a significant increase from RMB 53.87 million in the same period last year [14] - Huiri Group forecasts a consolidated profit of approximately HKD 250 million for the first half of 2025, up from HKD 37 million in the previous year [15] - Harbin Electric anticipates a net profit of approximately RMB 1.02 billion for the first half of 2025, a substantial increase from RMB 523 million in the same period last year [21] Group 4: Strategic Initiatives - Multiple departments released implementation details for cross-border asset management pilot business in Hainan Free Trade Port, allowing foreign investors to invest in various financial products [6] - Dongyangguang Jiangsu Pharmaceutical and Dongyangguang Pharmaceutical's merger agreement was approved by shareholders, with the new entity expected to be listed on August 7, 2025 [13] - Global New Materials International's acquisition of Merck's surface solutions business was approved by a special shareholder meeting, with a transaction value of EUR 665 million [17] Group 5: Industry Trends - GGII reported that China's power battery installation capacity reached approximately 288.1 GWh in the first half of 2025, a year-on-year increase of 44% [5] - The key product DB-1310 from InnoCare Pharma has received fast track designation from the FDA for treating advanced non-small cell lung cancer [20]

Group 1 - The core announcement involves a bondholder, Mr. Duan Chuanliang, exchanging convertible bonds for 547 million shares of Kangda Environmental, representing approximately 25.55% of the company's total issued share capital as of the announcement date [1] - Following the exchange, Mr. Duan and Sharp Profit will collectively hold rights to 1.156 billion shares, amounting to about 54.01% of the total issued share capital [1] - Sharp Profit, a wholly-owned subsidiary of China Water Affairs, is a major shareholder with approximately 28.46% of the company's issued share capital as of the announcement date [1] Group 2 - The company has 214 million stock options that have vested, allowing option holders to subscribe for shares at an exercise price of HKD 0.30 per share [2] - According to takeover rules, Mr. Duan must make an appropriate offer to option holders for all unexercised options [2] - The offer price for the shares is set at HKD 0.348 per share, which is higher than the conversion price of HKD 0.25 per share under the convertible bonds [2]

Group 1 - The core announcement involves the exchange of convertible bonds by Kanda Environmental, allowing bondholders to convert their bonds into 546,728,004 shares, representing approximately 25.55% of the company's total issued share capital at an exchange price of HKD 0.25 per share [1] - Following the completion of the exchange on July 21, 2025, the combined ownership of Duan Chuanliang and Sharp Profit will amount to 1,155,718,004 shares, which is about 54.01% of the total issued share capital of the company [1] - Sharp Profit, a wholly-owned subsidiary of China Water, is a major shareholder, holding approximately 28.46% of the company's total issued share capital as of the date of the announcement [1] Group 2 - Due to the bond exchange, Duan Chuanliang is required to make a mandatory unconditional cash offer for all shares, excluding those already owned or agreed to be acquired by him and Sharp Profit [2] - Duan and Sharp Profit will act as joint offerors for the share offer, with an expected acquisition distribution of approximately 93.00% and 7.00% respectively [2] - China Water, through its subsidiary Sharp Profit, is positioned to maintain or increase its strategic investment in the company, which is primarily engaged in urban water supply, wastewater treatment, and environmental services [2]

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聯合公告的內容概不負 責，對其準確性或完整性亦不發表任何聲明，並明確表示，概不對因本聯合公告全 部或任何部分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。 本聯合公告僅供參考，並不構成收購、購買或認購本公司證券之邀請或要約，亦 非在任何司法權區招攬任何投票或批准。 本聯合公告之全部或部分內容不得在、向或從任何將構成違反其適用法律或法規 之司法權區發佈、刊發或分發。 段傳良先生 （於開曼群島註冊成立並遷冊往百慕達之有限公司） （股份代號：855） KANGDA INTERNATIONAL ENVIRONMENTAL COMPANY LIMITED （於開曼群島註冊成立的有限公司） （股份代號：6136） 康 達 國 際 環 保 有 限 公 司 SHARP PROFIT INVESTMENTS LIMITED 聯合公告 (1)第一上海證券有限公司代表聯合要約人 提出強制性無條件現金要約 以收購康達國際環保有限公司全部已發行股份 聯合要約人的要約代理 第一上海證券有限公司 聯合要約人的財務顧問 第一上海融資有限公司 獨立董事委員會的獨立財務顧問 – 1 ...

Core Viewpoint - The company experienced a significant decline in performance due to a one-time provision for expected credit losses of HKD 498 million, leading to a year-on-year drop in net profit by 29.9% in FY2025 [1] Group 1: Financial Performance - In FY2025, the company reported revenue of HKD 11.656 billion, a decrease of 9.4% year-on-year, and a net profit of HKD 1.075 billion, down 29.9% year-on-year [1] - The one-time provision for other receivables resulted in an expected credit loss of HKD 498 million, significantly impacting the company's year-on-year performance [1] Group 2: Business Segments - In the water supply segment, urban water supply revenue was HKD 7.498 billion, a decrease of 9.4%, while the segment profit was HKD 2.493 billion, an increase of 0.1% [2] - The operating income in the water supply segment grew by 6.5% to HKD 3.526 billion, while construction services declined by 27.9% to HKD 2.833 billion [2] - In the direct drinking water business, operating services increased by 7.2% to HKD 315 million, but construction services fell by 82.8% to HKD 220 million [2] Group 3: Cash Flow and Dividends - A turning point in free cash flow is expected in FY2025, with capital expenditures dropping to approximately HKD 3.4 billion from a historical high of HKD 5.3 billion in FY2024 [3] - The total dividend for FY2025 is maintained at HKD 457 million, consistent with FY2024, with a dividend payout ratio of 42.53% [3] - With the continuous improvement in free cash flow, there is significant potential for an increase in dividends [3]

Core Viewpoint - China Water Affairs (00855) is currently valued at a significant discount compared to its peers, with a target price of HKD 7.80 and a "Buy" rating from CITIC Securities, reflecting a 20% valuation discount based on a target PE of 10x for FY2025 [1] Group 1: Financial Performance - The company's overall gross margin improved by 0.7 percentage points to 37.8% in FY2025, with notable increases in profitability across all business segments, including urban water supply, pipeline drinking water, and environmental protection [2] - The company’s sales, management, and financial expense ratios showed mixed changes, with financial expenses increasing due to a high proportion of US dollar debt, but there is potential for reduction through debt restructuring and a declining interest rate environment [2] Group 2: Growth Drivers - In FY2025, the company commissioned 81.7 million tons per day of new water production capacity, leading to a 7.0% increase in water sales volume to 1.5 billion tons, with further growth expected as additional capacity comes online in FY2026 [3] - The company has implemented water price adjustments in several projects, with expectations that total adjustments could exceed 1 million tons per day, benefiting from ongoing reforms in water pricing across major cities [3] Group 3: Cash Flow and Dividends - For the first time since 2020, the company achieved positive free cash flow of HKD 1.58 billion in FY2025, supported by a reduction in capital expenditures [4] - The company maintained its dividend at HKD 0.28 per share, with a 12 percentage point increase in the payout ratio to 42%, indicating a commitment to returning value to shareholders [4]

Core Insights - The company reported a total revenue of HKD 12.2 billion for FY2025, a decrease of 5.1% year-on-year, and a net profit attributable to shareholders of HKD 1.075 billion, down 29.9% year-on-year [1][2] Revenue Breakdown - The company's main business revenue was HKD 11.656 billion, a decline of 9.4% year-on-year, primarily due to reduced income from water supply and direct drinking water installation, maintenance, and construction services [2] - Revenue from the urban water supply segment was HKD 7.498 billion, down 9.4% year-on-year, with segment profit slightly increasing by 0.1% to HKD 2.493 billion due to cost control [2] - The direct drinking water segment saw revenue drop by 61.9% to HKD 0.657 billion, with segment profit decreasing by 58.9% [2] - The environmental protection segment achieved revenue of HKD 1.523 billion, up 42.2% year-on-year, with segment profit increasing by 56.9% [2] - Total construction revenue was HKD 0.664 billion, down 19.7% year-on-year, with segment profit decreasing by 9.3% [2] - Property revenue reached HKD 0.361 billion, with segment profit increasing by 16.5% [2] Operational Performance - Water supply operations generated revenue of HKD 3.526 billion, an increase of 6.5% year-on-year, with water sales volume rising by 7.4% to 1.5 billion tons [3] - The average water price was HKD 2.35 per ton, with over 20 projects initiating price adjustment procedures [3] - Direct drinking water operations revenue increased by 7.2% to HKD 0.315 billion, with a compound annual growth rate of 29.8% from FY22 to FY25 [4] - Direct drinking water equipment revenue surged by 226.3% to HKD 0.078 billion [4] Capital Expenditure and Cash Flow - Capital expenditure peaked at HKD 5.33 billion in FY2024 and is projected to decrease to HKD 3.4 billion in FY2025, with a target of under HKD 2 billion for FY2026 [4] - The company maintained a stable total dividend of HKD 0.28 per share, with a dividend payout ratio of 42.5%, reflecting a year-on-year increase of 12.7 percentage points [4] Profit Forecast - The decline in FY2025 performance was primarily due to one-time impairment losses, with net profit forecasts for FY2026 and FY2027 adjusted down to HKD 1.372 billion and HKD 1.387 billion, respectively [4] - The projected net profit for FY2028 is HKD 1.415 billion, corresponding to price-earnings ratios of 7.2, 7.1, and 6.9 times for FY2026, FY2027, and FY2028 [4]

Core Viewpoint - Insurance capital is increasingly active in the capital market, with a significant acceleration in shareholding actions, indicating a strong interest in dividend stocks, particularly in the banking sector and public utilities [1][4]. Group 1: Shareholding Actions - As of July 2, 2025, insurance companies have made 18 shareholding actions, surpassing the total of 20 for the entire year of 2024 and significantly exceeding the 2023 total [1][4]. - Li'an Life announced a shareholding action in Jiangnan Water, increasing its stake from 4.91% to 5.03% after purchasing 1.1 million shares [3]. - Major shareholders like Great Wall Life are also actively buying shares, indicating a trend of increased participation in the market [4]. Group 2: Investment Focus - The focus of insurance capital has shifted towards H-shares and banking stocks, which are favored due to their significant discounts compared to A-shares and high dividend yields above 5% [4][8]. - The stable profitability and low volatility of banking stocks, especially state-owned banks, align with the risk preferences of insurance capital [4][9]. - The regulatory environment has become more favorable, encouraging insurance funds to increase their equity investments, with a reported 34.9 trillion yuan in investment balance as of Q1 2025, a 16.7% year-on-year increase [8]. Group 3: Strategic Implications - Insurance companies are not only focusing on financial returns but also on industrial synergy, as seen in the case of Huaxia Life's investment in Hangzhou Bank to enhance insurance and banking collaboration [5]. - The trend of shareholding actions is expected to continue, with a potential diversification into sectors like public utilities, environmental protection, and transportation, which offer stable cash flows and are less affected by economic cycles [9][10]. - Future investments are likely to prioritize high-dividend, high-capital appreciation potential companies, aligning with the long-term, stable needs of the insurance industry [10].

Investment Rating - The investment rating for China Water Affairs (00855.HK) is "Buy" (maintained) [1] Core Views - The report highlights that the core operational profit is steadily growing, with a cash flow turning point already evident. The decline in FY2025 performance is primarily due to one-time impairment impacts, while the core operational business remains robust [1][7] Financial Performance Summary - For FY2025, the total revenue is projected at HKD 12,200 million, a decrease of 5.12% year-on-year. The net profit attributable to shareholders is expected to be HKD 1,075 million, down 29.92% year-on-year [1][7] - The main business revenue is HKD 11,656 million, reflecting a 9.4% decline year-on-year, mainly due to reduced income from water supply and direct drinking water installation, maintenance, and construction services [1][7] - The report details segment performance: - Urban water supply revenue is HKD 7,498 million, down 9.4% year-on-year, with segment profit slightly up by 0.1% [1] - Direct drinking water revenue is HKD 657 million, down 61.9%, with segment profit down 58.9% [1] - Environmental segment revenue is HKD 1,523 million, up 42.2%, with segment profit increasing by 56.9% [1] - Total construction revenue is HKD 664 million, down 19.7%, with segment profit down 9.3% [1] - Property revenue is HKD 361 million, with segment profit up 16.5% [1] Future Projections - The report forecasts a net profit of HKD 1,372 million for FY2026, HKD 1,387 million for FY2027, and HKD 1,415 million for FY2028, with corresponding P/E ratios of 7.2, 7.1, and 6.9 times [1][7] - Capital expenditures are expected to decrease from HKD 53.3 billion in FY2024 to HKD 34 billion in FY2025, with a target of under HKD 20 billion for FY2026 [1][7] - The dividend per share for FY2025 is projected to remain stable at HKD 0.28, with a payout ratio of 42.5% and a dividend yield of 4.65% [1][7]

Group 1 - The company reported a revenue of approximately 11.657 billion HKD for the fiscal year ending March 31, 2025, representing a year-on-year decline of 9.4% [1] - The net profit for the same period was approximately 1.075 billion HKD, which reflects a significant year-on-year decrease of 29.9% [1]