Financial Performance - The company's operating revenue for the first half of 2020 was approximately CNY 2.59 billion, representing a 1.44% increase compared to CNY 2.56 billion in the same period last year[19]. - The net profit attributable to shareholders decreased by 6.06% to approximately CNY 791.94 million, down from CNY 843.01 million in the previous year[19]. - The net cash flow from operating activities was approximately CNY 976.28 million, a decrease of 3.74% compared to CNY 1.01 billion in the same period last year[19]. - Basic earnings per share decreased by 11.11% to CNY 0.16, compared to CNY 0.18 in the same period last year[20]. - The weighted average return on net assets decreased to 5.20%, down from 5.78% in the previous year, a reduction of 0.58 percentage points[20]. - The company reported a net profit margin of approximately 26.8% for the first half of 2020, compared to 28.3% in the same period of 2019[134]. - The total profit for the first half of 2020 was CNY 846,871,180.05, compared to CNY 902,548,041.90 in the first half of 2019, reflecting a decline of 6.2%[135]. - The company's investment income for the first half of 2020 was CNY 106,993,639.29, an increase from CNY 100,601,653.57 in the same period of 2019[137]. - The total comprehensive income for the first half of 2020 was CNY 601,359,633.00, down from CNY 856,719,208.60 in the first half of 2019[136]. Assets and Liabilities - The total assets increased by 4.17% to approximately CNY 22.62 billion, compared to CNY 21.71 billion at the end of the previous year[19]. - The net assets attributable to shareholders decreased by 4.18% to approximately CNY 14.51 billion, down from CNY 15.15 billion at the end of the previous year[19]. - The company's total assets as of June 30, 2020, were CNY 18,626,449,522.79, up from CNY 17,183,081,790.21 at the end of 2019, indicating a growth of approximately 8.4%[132]. - Total liabilities increased to CNY 6,545,302,823.95 as of June 30, 2020, compared to CNY 4,303,451,951.48 at the end of 2019, marking an increase of about 51.9%[132]. - The company's total liabilities were reported at 22,350,549,000 RMB, indicating a rise from 21,000,000,000 RMB, which is an increase of about 6.43%[153]. Cash Flow - The net cash flow from operating activities for the first half of 2020 was 1,313,776,636.34 RMB, a significant increase compared to 355,940,294.09 RMB in the same period of 2019, reflecting a growth of approximately 269%[143]. - The total cash inflow from investment activities was 1,562,745,378.12 RMB, compared to 824,037,685.44 RMB in the previous year, indicating a year-over-year increase of about 90%[143]. - The net cash flow from financing activities was 309,886,135.10 RMB, a recovery from a negative cash flow of -1,351,135,865.34 RMB in the same period last year[144]. - The total cash and cash equivalents at the end of the period reached 2,380,340,702.24 RMB, up from 1,505,182,797.34 RMB at the end of the previous year, marking an increase of approximately 58%[144]. Investments and Acquisitions - The company has acquired a 20% stake in Zhongzhou Water Holdings, indicating strategic expansion in the water services sector[29]. - The company made equity investments totaling 15.095 million RMB in Chengdu Chiyuan Environmental Engineering Co., Ltd. and 26.844 million RMB in Chongqing Luoyu Environmental Technology Co., Ltd.[43]. - The company completed the acquisition of assets related to the Wuling Town-level sewage treatment plant and others for 45.3692 million yuan, with a total payment of 31.7584 million yuan made by the end of the reporting period[72]. - The company has committed to maintaining the independence of Chongqing Water Group's procurement, production, and sales systems post-acquisition[61]. Debt and Financing - The company issued a corporate bond of 2 billion RMB during the reporting period, resulting in a cash increase of 43.75% in monetary funds, totaling approximately 3.216 billion RMB[28]. - The company's debt-to-asset ratio increased to 35.67%, up 5.54 percentage points, primarily due to the issuance of 2 billion RMB in corporate bonds[37]. - The company has foreign currency borrowings amounting to JPY 8.60 billion, EUR 98.78 million, and USD 2.78 million, which are subject to exchange rate fluctuations impacting financial results[51]. - The company’s bond issuance has been successfully completed and listed on the Shanghai Stock Exchange[113]. Operational Capacity - The company has a water supply capacity of 2.658 million cubic meters per day and a wastewater treatment capacity of 3.4995 million cubic meters per day as of June 30, 2020[31]. - The company has a total of 40 water treatment plants and 81 wastewater treatment plants under its operation, indicating a strong infrastructure presence in the region[31]. - The company operates under a government procurement model for wastewater treatment, ensuring stable and reasonable profits through a pricing mechanism reviewed every three years[32]. Risks and Compliance - The company faces risks related to the inability to timely adjust water prices in response to rising supply costs, which could impact profitability[47]. - The company is exposed to risks from extreme weather and sudden water pollution events, which could increase raw water procurement and purification costs[47]. - The company is committed to ensuring compliance with environmental standards to mitigate risks associated with potential penalties and increased operational costs[52]. Corporate Governance - The company held its 2019 annual general meeting on May 13, 2020, where 8 proposals were approved, including the 2019 board work report[57]. - The company confirmed that it has not engaged in any business activities that compete with its main operations as per the commitment made by its controlling shareholder[60]. - The company has appointed Tianzhi International Accounting Firm as the auditor for the 2020 financial report and internal control audit[64]. Research and Development - Research and development expenses decreased by 42.01% to 685 thousand RMB, attributed to reduced material costs for R&D projects[39]. - The company continues to strengthen its technological capabilities by collaborating with renowned universities and research institutions to drive R&D and application of relevant technologies[36]. - The company is focusing on digital transformation and innovation in water management, implementing "smart water" initiatives using big data and cloud computing[33].

[Important Notice](index=3&type=section&id=Item%20I.%20Important%20Notice) This section confirms the report's authenticity and audit status, emphasizing management's responsibility for its content [Report Authenticity and Audit Status](index=3&type=section&id=Item%201.1%20Report%20Authenticity%20and%20Audit%20Status) The company's board of directors, supervisory board, and senior management ensure the truthfulness, accuracy, and completeness of this quarterly report, assuming corresponding legal responsibilities; the report was approved by all directors but remains unaudited - Company management guarantees the truthfulness, accuracy, and completeness of this report, free from false records, misleading statements, or major omissions[3](index=3&type=chunk) - This company's Q1 2020 report is unaudited[3](index=3&type=chunk) [Company Overview](index=3&type=section&id=Item%20II.%20Company%20Overview) This section provides an overview of the company's key financial performance, shareholder structure, and preferred share status for the reporting period [Key Financial Data](index=3&type=section&id=Item%202.1%20Key%20Financial%20Data) In Q1 2020, the company's operating revenue reached **1.136 billion yuan**, growing by 2.74%, while net profit attributable to shareholders significantly decreased by 20.69% to **269 million yuan**, with non-recurring adjusted net profit down 23.45% and basic EPS at **0.06 yuan**, a 14.29% decline Key Financial Indicators for Q1 2020 | Indicator | Current Period | Prior Year Period | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue (Yuan) | 1,135,621,880.52 | 1,105,310,883.77 | 2.74% | | Net Profit Attributable to Shareholders (Yuan) | 268,543,628.03 | 338,584,192.42 | -20.69% | | Non-recurring Net Profit Attributable to Shareholders (Yuan) | 237,830,023.32 | 310,667,825.97 | -23.45% | | Net Cash Flow from Operating Activities (Yuan) | 420,139,659.53 | 466,692,105.84 | -9.97% | | Basic Earnings Per Share (Yuan/share) | 0.06 | 0.07 | -14.29% | | Weighted Average Return on Net Assets (%) | 1.77% | 2.29% | Decrease of 0.52 percentage points | Non-recurring Gains and Losses for Q1 2020 | Item | Current Period Amount (Yuan) | | :--- | :--- | | Gains/Losses from Disposal of Non-current Assets | -3,786,884.07 | | Government Subsidies Included in Current P&L | 13,787,133.39 | | Gains/Losses from Entrusted Investments or Asset Management | 4,030,000.00 | | Custody Fee Income from Entrusted Operations | 4,078,296.02 | | Other Non-operating Income and Expenses | 18,047,675.13 | | **Total** | **30,713,604.71** | [Shareholder Ownership](index=4&type=section&id=Item%202.2%20Shareholder%20Ownership) As of the end of the reporting period, the company had 42,959 shareholders, with the top two state-owned legal entities, Chongqing Derun Environment Co., Ltd. and Chongqing Water Assets Management Co., Ltd., holding a combined 88.56% and acting in concert - As of the end of the reporting period, the company had **42,959 shareholders**[7](index=7&type=chunk) Top Ten Shareholders' Holdings | Shareholder Name | Number of Shares Held | Percentage (%) | | :--- | :--- | :--- | | Chongqing Derun Environment Co., Ltd. | 2,401,800,000 | 50.04 | | Chongqing Water Assets Management Co., Ltd. | 1,849,160,689 | 38.52 | | China Securities Finance Co., Ltd. | 114,293,591 | 2.38 | | Central Huijin Asset Management Co., Ltd. | 26,953,900 | 0.56 | - The company's top two shareholders, Chongqing Derun Environment Co., Ltd. and Chongqing Water Assets Management Co., Ltd., are considered parties acting in concert under the "Measures for the Administration of the Takeover of Listed Companies"[8](index=8&type=chunk) [Preferred Shareholder Status](index=5&type=section&id=Item%202.3%20Preferred%20Shareholder%20Status) At the end of the reporting period, the company had no preferred shareholders - The company has no preferred shareholders[8](index=8&type=chunk) [Significant Events](index=5&type=section&id=Item%20III.%20Significant%20Events) This section details major changes in financial statement items and indicators, along with the progress of significant corporate actions during the reporting period [Analysis of Significant Changes in Key Financial Statement Items and Indicators](index=5&type=section&id=Item%203.1%20Analysis%20of%20Significant%20Changes%20in%20Key%20Financial%20Statement%20Items%20and%20Indicators%20and%20Their%20Causes) During the reporting period, several financial statement items underwent significant changes, including an 86.67% increase in monetary funds due to a **2 billion yuan** bond issuance, a 76.72% decrease in accounts receivable reclassified as contract assets under new revenue standards, a shift in financial expenses from negative to positive due to exchange losses, and a **1385.05%** decrease in other comprehensive income from fair value changes of other equity instruments Key Balance Sheet Items with Significant Changes | Statement Item | Change (%) | Primary Reason | | :--- | :--- | :--- | | Monetary Funds | 86.67% | Due to issuance of 2 billion yuan corporate bonds | | Accounts Receivable | -76.72% | Implementation of new revenue standards, partly reclassified to contract assets | | Other Receivables | -72.88% | Recovery of 400 million yuan principal from matured entrusted wealth management | | Other Non-current Assets | -61.92% | Completion of 20% equity acquisition of Zhongzhou Water, reclassified to long-term equity investment | | Short-term Borrowings | -100.00% | Repayment of one-year bank loans | | Bonds Payable | Not applicable | New issuance of 2 billion yuan corporate bonds | Key Income Statement Items with Significant Changes | Statement Item | Change (%) | Primary Reason | | :--- | :--- | :--- | | Financial Expenses | Not applicable | Exchange rate fluctuations led to exchange losses of **13.67 million yuan** on foreign currency borrowings, compared to exchange gains in the prior year | | Investment Income | -38.53% | Due to changes in operating performance of investees | | Non-operating Expenses | 160.97% | Net loss from disposal of fixed assets increased compared to the prior year | | Minority Interest Income/Loss | 654.87% | Net profit of controlled subsidiaries increased compared to the prior year | | Other Comprehensive Income | -1,385.05% | Due to changes in public quotes of other equity instruments in active markets | [Progress of Significant Events](index=7&type=section&id=Item%203.2%20Analysis%20of%20Progress%2C%20Impact%2C%20and%20Solutions%20for%20Significant%20Events) On March 10, 2020, the company successfully completed the issuance of its first tranche of **2 billion yuan** corporate bonds with a 5-year term and a 3.37% coupon rate, which began trading on the Shanghai Stock Exchange on March 18 - The company completed the issuance of "20 Yu Shui 01" corporate bonds, totaling **2 billion yuan** with a 5-year term and an annual interest rate of **3.37%**[13](index=13&type=chunk) [Appendix](index=8&type=section&id=Item%20IV.%20Appendix) This section provides the company's unaudited financial statements for the first quarter of 2020, along with explanations for adjustments made due to the first-time adoption of new accounting standards [Financial Statements](index=8&type=section&id=Item%204.1%20Financial%20Statements) This appendix includes the company's unaudited Q1 2020 consolidated and parent company balance sheets, income statements, and cash flow statements [Consolidated Balance Sheet](index=8&type=section&id=Consolidated%20Balance%20Sheet) As of March 31, 2020, total assets were **23.24 billion yuan**, a 7.03% increase from year-end, with net assets attributable to shareholders at **15.275 billion yuan**, up 0.84%, and total liabilities at **7.94 billion yuan**, primarily due to a new **2 billion yuan** in bonds payable Key Consolidated Balance Sheet Items (Unit: Billion Yuan) | Item | March 31, 2020 | December 31, 2019 | Change | | :--- | :--- | :--- | :--- | | Total Assets | 23.24 | 21.713 | +7.03% | | Total Liabilities | 7.94 | 6.542 | +21.37% | | Equity Attributable to Parent Company Owners | 15.275 | 15.147 | +0.84% | [Consolidated Income Statement](index=12&type=section&id=Consolidated%20Income%20Statement) In Q1 2020, the company achieved total operating revenue of **1.136 billion yuan**, a 2.74% increase, while total operating costs rose by 10.17% to **916 million yuan**, mainly due to increased financial expenses, resulting in a net profit attributable to parent company shareholders of **269 million yuan**, a 20.69% decrease Key Consolidated Income Statement Items (Unit: Billion Yuan) | Item | Q1 2020 | Q1 2019 | Change | | :--- | :--- | :--- | :--- | | Total Operating Revenue | 1.136 | 1.105 | +2.74% | | Total Operating Costs | 0.916 | 0.831 | +10.17% | | Total Profit | 0.285 | 0.362 | -21.29% | | Net Profit Attributable to Parent Company Shareholders | 0.269 | 0.339 | -20.69% | [Consolidated Cash Flow Statement](index=15&type=section&id=Consolidated%20Cash%20Flow%20Statement) During the reporting period, net cash flow from operating activities was **420 million yuan**, a 9.97% decrease, while investing activities resulted in a net outflow of **48 million yuan**, and financing activities generated a net inflow of **1.573 billion yuan** from bond issuance, leading to a significant increase in cash and cash equivalents to **4.149 billion yuan** at period-end Consolidated Cash Flow Statement Overview (Unit: Billion Yuan) | Item | Q1 2020 | Q1 2019 | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 0.42 | 0.467 | | Net Cash Flow from Investing Activities | -0.048 | 0.216 | | Net Cash Flow from Financing Activities | 1.573 | -0.006 | | Cash and Cash Equivalents at Period-End | 4.149 | 4.039 | [Explanation of First-Time Adoption Adjustments for New Accounting Standards](index=18&type=section&id=Item%204.2%20Adjustments%20to%20Opening%20Financial%20Statements%20Upon%20First-Time%20Adoption%20of%20New%20Revenue%20and%20Lease%20Standards%20from%202020) Effective January 1, 2020, the company adopted new revenue standards, adjusting opening financial statements by reclassifying **72.3791 million yuan** from "Accounts Receivable" to "Contract Assets" and **755.245 million yuan** from "Advances from Customers" to "Contract Liabilities," with no impact on total assets, total liabilities, or net assets - The company adjusted its financial statements as of January 1, 2020, due to the adoption of new revenue standards[32](index=32&type=chunk) Impact of New Revenue Standards on Opening Consolidated Balance Sheet | Item | Amount Before Adjustment (Yuan) | Adjustment Amount (Yuan) | Amount After Adjustment (Yuan) | | :--- | :--- | :--- | :--- | | Accounts Receivable | 968,998,838.67 | -72,379,053.49 | 896,619,785.18 | | Contract Assets | 0.00 | +72,379,053.49 | 72,379,053.49 | | Advances from Customers | 755,245,035.79 | -755,245,035.79 | 0.00 | | Contract Liabilities | 0.00 | +755,245,035.79 | 755,245,035.79 | [Audit Report](index=23&type=section&id=Item%204.4%20Audit%20Report) This quarterly report is unaudited - This quarterly financial report is unaudited[39](index=39&type=chunk)

Financial Performance - Operating revenue increased by 16.09% to CNY 3,613,561,844.61 compared to the same period last year[8] - Net profit attributable to shareholders decreased by 9.78% to CNY 1,257,081,125.07 compared to the same period last year[8] - Basic earnings per share decreased by 6.45% to CNY 0.29[8] - Total operating revenue for Q3 2018 reached ¥1,326,770,068.82, an increase of 20.4% compared to ¥1,102,675,235.96 in Q3 2017[28] - Net profit for Q3 2018 was ¥595,551,628.78, representing a 25.8% increase from ¥473,598,725.90 in Q3 2017[30] - The total profit for the first nine months of 2018 was ¥1,491,290,004.65, a decrease of 9.3% compared to ¥1,643,823,674.91 in the same period of 2017[30] - The total comprehensive income for the first nine months of 2018 reached ¥1,000,016,882.53, compared to ¥1,323,646,196.80 for the same period in 2017, showing a decline of 24.4%[36] Assets and Liabilities - Total assets decreased by 7.73% to CNY 18,650,391,494.59 compared to the end of the previous year[7] - Cash and cash equivalents decreased by 47.76% to ¥3,159,970,418.08 from the beginning of the year[11] - Total current assets decreased from ¥8,476,682,956.09 to ¥6,461,030,135.63, a decline of approximately 23.7%[20] - Total non-current assets increased from ¥11,735,560,859.70 to ¥12,189,361,358.96, reflecting a growth of about 3.9%[21] - Total liabilities decreased from ¥5,918,565,904.43 to ¥4,481,126,152.72, a reduction of approximately 24.3%[22] - Current liabilities fell from ¥3,905,988,066.86 to ¥2,461,949,634.43, a decrease of about 37.0%[22] - Total equity attributable to shareholders decreased from ¥14,247,826,786.43 to ¥14,121,980,200.18, a reduction of about 0.9%[22] Cash Flow - Net cash flow from operating activities increased by 15.99% to CNY 1,606,890,085.73 for the period from January to September[7] - Operating cash inflow for the year-to-date period reached ¥4,821,415,438.65, a decrease of 3.9% compared to ¥5,016,701,299.94 in the previous year[39] - Cash inflow from investment activities totaled ¥2,173,897,431.25, down 26.8% from ¥2,969,838,835.63 in the same period last year[40] - Cash outflow from financing activities amounted to ¥3,152,730,292.33, significantly higher than ¥1,620,358,502.17 in the prior year[40] - The net increase in cash and cash equivalents was -¥2,888,689,401.36, compared to -¥959,987,900.25 in the same period last year[40] Shareholder Information - The total number of shareholders at the end of the reporting period was 46,204[9] - The largest shareholder, Chongqing Derun Environment Co., Ltd., holds 50.04% of the shares[10] Other Financial Metrics - Government subsidies recognized in the current period amounted to CNY 26,044,904.76[8] - Non-operating income and expenses totaled CNY 65,569,721.24 for the current period[8] - The weighted average return on net assets decreased by 1.05 percentage points to 9.89%[8] - Research and development expenses decreased by 69.49% to ¥50,810.07 compared to the same period last year[13] - Other income dropped by 64.49% to ¥185,388,763.88 year-on-year[13] - The company received a tax refund of ¥114,137,965.24 for VAT overpayment from April 2017 to April 2018[16] - The company recorded other income of ¥101,330,316.86 in Q3 2018, a significant increase from ¥29,970,000.00 in Q3 2017, reflecting improved operational efficiency[35]

Financial Performance - The company's operating revenue for the first half of 2018 was approximately RMB 2.29 billion, representing a year-on-year increase of 13.77% compared to RMB 2.01 billion in the same period last year[17]. - The net profit attributable to shareholders of the listed company decreased by 22.14% to approximately RMB 796 million, down from RMB 1.02 billion in the previous year[17]. - The basic earnings per share for the first half of 2018 was RMB 0.17, a decrease of 19.05% compared to RMB 0.21 in the same period last year[18]. - The company reported a significant decrease in cash assets, with a year-end balance of ¥2,638,610,970.09, down 56.38% from the beginning of the year[29]. - The company reported a net cash flow from operating activities of approximately RMB 807 million, an increase of 9.28% compared to RMB 739 million in the same period last year[17]. - Net profit was 796 million RMB, a decrease of 22.14% year-on-year, but adjusted for a one-time tax refund last year, it increased by 10.66%[34]. - The profit margin decreased to 34.9% from 50.9% year-over-year[131]. - The total profit for the current period was ¥851,635,381.82, down 25.8% from ¥1,147,786,939.26 in the previous period[130]. Assets and Liabilities - The total assets of the company at the end of the reporting period were approximately RMB 17.79 billion, a decrease of 11.98% from RMB 20.21 billion at the end of the previous year[17]. - The company's asset-liability ratio improved to 23.71%, down 5.57 percentage points from the beginning of the year[34]. - Total assets decreased from CNY 20,212,243,815.79 to CNY 17,791,088,624.75, a decline of approximately 6.5%[124]. - Current liabilities decreased from CNY 3,905,988,066.86 to CNY 2,165,890,529.75, representing a reduction of about 44.6%[124]. - Total liabilities decreased from CNY 5,329,814,790.24 to CNY 3,376,648,176.00, a reduction of approximately 36.6%[128]. Cash Flow - The company reported a net cash flow from operating activities of 808 million RMB, an increase of 9.28% year-on-year[37]. - Cash outflow from financing activities totaled CNY 3,125,004,800.81, significantly higher than CNY 1,544,050,638.64 in the same period last year[137]. - The ending balance of cash and cash equivalents was CNY 2,619,218,188.64, down from CNY 3,965,984,210.26 at the end of the previous period[137]. - Operating cash inflow for the first half of 2018 was CNY 3,006,888,581.87, a decrease of 10.8% compared to CNY 3,371,812,267.17 in the same period last year[136]. Acquisitions and Investments - The company completed the acquisition of 100% equity in Chongqing Qianjiang Drainage Co., Ltd., which is a wholly-owned subsidiary of Chongqing Water Asset Management Co., Ltd.[19]. - The company acquired 100% equity of Qianjiang Drainage Co., Ltd. for 71.21 million RMB during the reporting period[43]. - The company provided a shareholder loan of RMB 117 million to Chongqing Sino-French Water, with a loan term of ten years, primarily for the acquisition of the Chongqing Changshou Chemical Park water supply and drainage project[74]. Operational Highlights - The company operates under a 30-year exclusive franchise for water supply and sewage treatment in Chongqing, ensuring stable revenue streams[31]. - The company operates 39 sewage treatment plants that meet the Class A discharge standards, as per the national pollution discharge standards[79]. - The company has established a comprehensive water quality monitoring system with over 300 detection capabilities, ensuring the safety and quality of water supply and sewage discharge[83]. - The company has 51 wastewater treatment plants with a daily processing capacity of 2.4489 million cubic meters[160]. Risk Management - The company has outlined potential risks in its operations, which are detailed in the report[5]. - The company faces risks related to raw material supply, energy supply and pricing, and government-regulated water pricing adjustments[48][49]. - The company is subject to increased operational costs and potential penalties due to stricter environmental regulations[52]. - The company plans to enhance risk management and cost control measures to mitigate potential financial impacts from rising costs and regulatory changes[50][52]. Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 47,038[100]. - The top shareholder, Chongqing Derun Environment Co., Ltd., holds 2,401,800,000 shares, representing 50.04% of the total shares[101]. - The company reported no changes in its total share capital or share structure during the reporting period[99]. Legal and Compliance - The company has ongoing significant litigation matters, including arbitration initiated by its subsidiary, which has not yet proceeded to a hearing[62]. - There were no significant penalties or administrative sanctions imposed on the company or its executives during the reporting period[66]. - The company has not faced any penalties for environmental violations during the reporting period, adhering to relevant environmental laws and regulations[86]. Corporate Governance - The company has not implemented any stock incentive plans or employee shareholding plans during the reporting period[68]. - The company’s vice president, Wang Taolang, resigned due to reaching retirement age, effective January 1, 2018[106]. - The company’s actual controller remains the Chongqing State-owned Assets Supervision and Administration Commission[153]. Accounting Policies - The company's financial statements are prepared based on the going concern principle, indicating no significant issues affecting its ability to continue operations[163]. - The company’s accounting policies comply with the requirements of enterprise accounting standards, ensuring accurate financial reporting[165]. - The company recognizes interest income on held-to-maturity investments using the effective interest method, with the effective interest rate determined at acquisition[180].

[Important Notice](index=3&type=section&id=Item%20I.%20Important%20Notice) [Board of Directors' Statement](index=3&type=section&id=1.1%20Board%20of%20Directors%27%20Statement) The Board of Directors, Supervisory Board, and senior management affirm the truthfulness and completeness of this unaudited quarterly report - Company management guarantees the truthfulness, accuracy, and completeness of this quarterly report[7](index=7&type=chunk) - This company's first quarter report is unaudited[7](index=7&type=chunk) [Company Overview](index=3&type=section&id=Item%20II.%20Company%20Overview) [Key Financial Data](index=3&type=section&id=2.1%20Key%20Financial%20Data) In Q1 2018, operating revenue grew by 11.33% to RMB 976 million, while net profit attributable to shareholders declined by 42.99% to RMB 319 million due to a high prior-year base Key Financial Indicators for Q1 2018 | Indicator | Current Period | Prior Year Period | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue (RMB) | 976,338,577.38 | 876,980,127.43 | 11.33% | | Net Profit Attributable to Shareholders (RMB) | 318,754,868.52 | 559,147,807.57 | -42.99% | | Net Profit Attributable to Shareholders (Excluding Non-recurring Items) (RMB) | 290,662,044.29 | 543,852,999.11 | -46.56% | | Net Cash Flow from Operating Activities (RMB) | 358,402,162.72 | 276,347,441.01 | 29.69% | | Basic Earnings Per Share (RMB/share) | 0.07 | 0.12 | -41.67% | | Weighted Average Return on Net Assets (%) | 2.22% | 4.08% | Decrease of 1.86 percentage points | - Total non-recurring gains and losses for the period amounted to **RMB 28.09 million**, primarily comprising government subsidies and non-operating income/expenses[7](index=7&type=chunk)[8](index=8&type=chunk) [Shareholder Information](index=4&type=section&id=2.2%20Shareholder%20Information) As of the reporting period end, the company had 49,204 shareholders, with the top two state-owned entities holding a concentrated 88.56% stake as parties acting in concert - As of the end of the reporting period, the company had **49,204 shareholders**[9](index=9&type=chunk) Top Two Shareholders' Holdings | Shareholder Name | Number of Shares Held | Proportion (%) | Shareholder Nature | | :--- | :--- | :--- | :--- | | Chongqing Derun Environment Co, Ltd | 2,401,800,000 | 50.04 | State-owned Legal Entity | | Chongqing Water Assets Management Co, Ltd | 1,849,160,689 | 38.52 | State-owned Legal Entity | - The top two shareholders, Chongqing Derun Environment Co, Ltd and Chongqing Water Assets Management Co, Ltd, are parties acting in concert[10](index=10&type=chunk) [Significant Events](index=6&type=section&id=Item%20III.%20Significant%20Events) [Analysis of Significant Changes in Key Financial Statement Items and Indicators](index=6&type=section&id=3.1%20Analysis%20of%20Significant%20Changes%20in%20Key%20Financial%20Statement%20Items%20and%20Indicators) Significant financial changes include a 41.95% decrease in cash due to bond redemption and wealth management product purchases, and a 42.86% decline in net profit due to a high prior-year base from a VAT refund - Cash and cash equivalents at period-end decreased by **41.95%** from the beginning of the year, primarily due to the redemption of the '12 Yu Shui Wu' corporate bond principal and interest totaling **RMB 1.577 billion** and the purchase of **RMB 1 billion** in entrusted wealth management products[11](index=11&type=chunk) - Other receivables at period-end increased by **89.24%** from the beginning of the year, mainly due to the purchase of **RMB 1 billion** in principal-protected, income-guaranteed entrusted wealth management products[11](index=11&type=chunk)[12](index=12&type=chunk) - Net profit and basic earnings per share significantly decreased year-on-year, primarily because the company received a **RMB 338 million** VAT refund for centralized procurement of sewage treatment services from the Chongqing Municipal Finance in the prior year, which was recorded as 'Other Income' and is absent this period[13](index=13&type=chunk)[14](index=14&type=chunk) [Progress of Significant Events](index=7&type=section&id=3.2%20Progress%20of%20Significant%20Events) On January 29, 2018, the company fully redeemed the '12 Yu Shui Wu' corporate bond, totaling RMB 1.5768 billion in principal and interest, leading to its delisting - On January 29, 2018, the company timely and fully redeemed the principal and interest of the '12 Yu Shui Wu' corporate bond, totaling **RMB 1.5768 billion**, and the bond has been delisted[16](index=16&type=chunk) [Appendix](index=8&type=section&id=Item%20IV.%20Appendix) [Financial Statements](index=8&type=section&id=4.1%20Financial%20Statements) This appendix provides the company's unaudited consolidated and parent company financial statements for Q1 2018 - Consolidated Balance Sheet as of March 31, 2018 is provided[18](index=18&type=chunk)[19](index=19&type=chunk) - Consolidated Income Statement for January-March 2018 is provided[26](index=26&type=chunk)[27](index=27&type=chunk) - Consolidated Cash Flow Statement for January-March 2018 is provided[31](index=31&type=chunk)[33](index=33&type=chunk)