Group 1: Project Progress - The Chengdu Water Supply Plant Phase III has entered trial operation with a remaining capacity of 400,000 tons/day [2] - Several projects, including the Chengdu Sixth Reclaimed Water Plant Phase II and the Chengdu Central Urban Kitchen Waste Treatment Project Phase III, are progressing and expected to be operational within 1-2 years [2] Group 2: Accounts Receivable - The company's accounts receivable have increased due to expanded business scale and market development efforts [2][3] - The company actively collects receivables in line with local payment policies [3] Group 3: Market Value Management - The company emphasizes market value management to enhance intrinsic value and improve operational efficiency [4] - Continuous strategic layout and market feedback are integral to the company's value growth [4] Group 4: Cost Reduction and Efficiency Improvement - The company implements refined management and innovation to reduce costs and improve efficiency [5] - Establishment of a smart cloud control center and five operational centers enhances management quality and efficiency [5] Group 5: Future Capital Expenditure and Dividends - Significant capital expenditure is expected due to multiple ongoing projects, with a gradual decrease anticipated as projects become operational [6] - The company aims to increase dividend levels as free cash flow improves following project completions [6]

Report Summary Report Industry - The industry of the report is the utility industry [2] Core Viewpoints - As the company expands its market and grows its business, accounts receivable have increased but the company is actively collecting them and the second - half collection cycle is stable [23] - The company's sewage treatment service price is adjusted according to the concession agreement, with regular adjustments every 2 - 3 years and temporary adjustments possible for major cost changes. The average sewage treatment service price in Chengdu's central urban area from 2024 - 2026 is 2.63 yuan/ton [25] - The company focuses on market value management, aiming to enhance intrinsic value and improve the management mechanism [27] - Due to multiple project constructions, the company's capital expenditure has been high recently but will decline in 1 - 2 years after project completion. With more free cash flow, the company will increase dividend levels while considering business development needs [29] Section Summaries 01. Research Basic Situation - The research object is Xingrong Environment, belonging to the utility industry. The reception time was September 17, 2025, and the company's reception staff were Hu Han, Liang Yigu, and Zeng Qian [17] 02. Detailed Research Institutions - The research institutions include Guolian Fund (a fund management company with related personnel Rong Kai and Zheng Ling) and Changjiang Securities (a securities company with related personnel Xu Ke) [18] 03. Research Institution Proportion - No specific proportion information is provided in the text 04. Main Content Data - **Accounts Receivable**: With business expansion, accounts receivable have increased. The company is actively collecting them according to local policies, and the second - half collection cycle is stable [23] - **Sewage Treatment Pricing Mechanism**: The price is adjusted according to the concession agreement, with regular adjustments every 2 - 3 years. Temporary adjustments can be applied for major cost changes. The average price in Chengdu's central urban area from 2024 - 2026 is 2.63 yuan/ton [25] - **Market Value Management**: The company aims to enhance intrinsic value, improve operating efficiency, and perfect the market value management mechanism [27] - **Future Capital Expenditure and Dividend Consideration**: Capital expenditure has been high due to project construction but will decline after project completion. The company will increase dividend levels while considering business development needs [29]

Core Viewpoint - Chengdu Xingrong Environment Co., Ltd. conducted an online investor relations activity to address concerns regarding accounts receivable, sewage treatment pricing mechanisms, market value management, and future capital expenditures and dividends [1][2]. Accounts Receivable - The company has seen an increase in accounts receivable due to market expansion and business growth. It actively manages collections, with a stable overall collection cycle expected in the second half of the year despite regional differences in fiscal payment capabilities. The company emphasizes accounts receivable management and strictly implements bad debt provisioning policies, allowing for the reversal of provisions if receivables are collected [2]. Sewage Treatment Pricing Mechanism - The sewage treatment business has a periodic pricing adjustment mechanism, with potential adjustments occurring annually. Significant cost changes due to adjustments in sewage discharge standards, service area expansions, or capacity upgrades can lead to temporary price adjustments. The average tentative price for sewage treatment services in Chengdu's central urban area for the fifth phase (2024-2026) is set at 2.63 yuan per ton [2]. Market Value Management - The company places a high priority on market value management, aiming to enhance intrinsic value through strategic development and operational efficiency improvements. It actively seeks market feedback and continuously refines its market value management mechanisms [2]. Future Capital Expenditures and Dividends - Recent capital expenditures have been substantial due to multiple water supply, drainage, and solid waste project constructions. However, most of these projects are expected to be operational within the next 1-2 years, leading to a gradual decrease in capital expenditures. The company is committed to shareholder returns and plans to increase dividend levels as cash flow becomes more abundant following the completion of ongoing projects [2].

Group 1: Accounts Receivable Management - The company has seen an increase in accounts receivable due to market expansion and business growth, with a stable collection cycle expected in the second half of the year [2] - The company actively manages accounts receivable by implementing collection policies and adhering to bad debt provisioning policies, allowing for potential reversal of provisions if payments are recovered [2] Group 2: Wastewater Treatment Pricing Mechanism - The adjustment of wastewater treatment service fees is based on a pricing formula outlined in the franchise agreements, typically reviewed every 2 to 3 years [3] - The provisional average price for wastewater treatment in Chengdu's central urban area for the 2024-2026 period is set at 2.63 CNY per ton [3] Group 3: Market Value Management - The company prioritizes market value management to enhance intrinsic value, focusing on strategic development and operational efficiency to drive value growth [3] - Continuous feedback from the market is valued, with efforts to improve the market value management mechanism [3] Group 4: Capital Expenditure and Dividend Considerations - Significant capital expenditures are expected due to multiple water supply and waste projects, with most projects anticipated to be operational within 1-2 years [3] - As projects come online and generate cash flow, the company aims to increase dividend levels while balancing operational funding needs [3]

Core Insights - A total of 111 stocks in the Shanghai and Shenzhen markets have received net buying from major funds for five consecutive days or more as of September 16 [1] - The stock with the longest consecutive net buying days is Haotaitai, which has seen net buying for 14 consecutive trading days [1] - Other notable stocks with significant net buying days include Tianpu Co., CNOOC Engineering, Jianfeng Group, Jiankangyuan, Xingrong Environment, Shandong Publishing, Pudong Construction, and Hunan Haili [1]

Core Viewpoint - The company, Xingrong Environment, is a leading comprehensive water and environmental service provider in China, focusing on investment, research, design, construction, and operation across various business segments [2][4]. Business Overview - The company operates in several key areas: water supply, wastewater treatment, reclaimed water utilization, environmental services, and engineering projects. Environmental services include waste incineration power generation, leachate treatment, sludge disposal, and kitchen waste disposal [2]. Project Updates - In the first half of 2025, several projects were put into operation, including the Xiwayan Reclaimed Water Plant and the Chengdu First City Sewage Sludge Treatment Plant (Phase III). Ongoing projects include the Chengdu Water Supply Plant (Phase III), which has entered trial operation, and several other plants expected to be operational within 1-2 years [2][3]. Waste Incineration Projects - The Chengdu Wanxing Environmental Power Plant (Phase III) is under construction, with a waste processing capacity of 5,100 tons per day, along with sludge and kitchen waste processing capacities of 800 tons per day each, expected to be operational by 2026 [2]. Revenue Management - The Chengdu Water Supply Plant (Phase III) has entered trial operation, and revenue recognition will follow the terms of the franchise agreement and accounting policies during this period [3]. Market Expansion Plans - The company aims to deepen its presence in the Chengdu market while expanding its operations through mergers and acquisitions across the country, focusing on resource integration and industry segmentation [3]. Capital Expenditure and Dividends - The company has significant capital expenditures due to multiple ongoing projects, which are expected to decrease as these projects become operational. The company plans to enhance dividend levels as free cash flow improves with the completion of these projects [4]. Financial Performance - For the first half of 2025, the company reported a main revenue of 4.192 billion yuan, a year-on-year increase of 4.59%, and a net profit of 975 million yuan, up 5.03%. The second quarter saw a slight revenue increase of 0.31% but a net profit decline of 0.94% [4]. Profit Forecasts - Various institutions have provided profit forecasts for the company, with projected net profits of 2.13 billion yuan for 2025, 2.32 billion yuan for 2026, and 2.52 billion yuan for 2027, with target prices ranging from 6.95 to 9.10 yuan [6].

Company Overview - Xingrong Environment (SZ 000598) announced that it will accept research from Huatai Securities and Tianfu Linghang Fund on September 16, 2025, with company representatives Hu Han, Liang Yigu, and Zeng Qian participating in the reception and answering investor questions [1] Revenue Composition - For the first half of 2025, the revenue composition of Xingrong Environment is as follows: wastewater treatment accounts for 44.64%, the water supply industry accounts for 34.04%, leachate treatment accounts for 18.98%, and other industries account for 2.34% [1] Market Capitalization - As of the report date, the market capitalization of Xingrong Environment is 20.2 billion yuan [1]

Group 1: Company Overview - The company is a leading comprehensive water and environmental service provider in China, integrating investment, research and development, design, construction, and operation, with a complete industrial chain [2] - Main business segments include water supply, wastewater treatment, reclaimed water utilization, environmental protection, and engineering services, with environmental protection covering waste incineration power generation, leachate treatment, sludge disposal, and kitchen waste disposal [2] Group 2: Project Updates - In the first half of 2025, new projects put into operation include Chengdu Xiwayan Reclaimed Water Plant, Chengdu First City Sewage Sludge Treatment Plant (Phase III), and Qionglai Kitchen Waste Disposal Plant [3] - Ongoing projects include Chengdu Water Supply Plant (Phase III) with a remaining capacity of 400,000 tons/day in trial operation, and several other projects expected to be operational within 1-2 years [3] Group 3: Waste-to-Energy Projects - The Chengdu Wanxing Environmental Power Plant (Phase III) is under construction, with a waste processing capacity of 5,100 tons/day, sludge co-processing capacity of 800 tons/day, and kitchen waste processing capacity of 800 tons/day, expected to be operational in 2026 [3] Group 4: Market Expansion Strategy - The company focuses on deepening its presence in the Chengdu market while actively integrating water and environmental resources in surrounding areas, leveraging scale effects to create incremental performance [4] - Plans to expand nationally through mergers and acquisitions, enhancing industry layout and development momentum [4] Group 5: Capital Expenditure and Dividends - The company has significant capital expenditures due to multiple water supply and solid waste projects, with most projects expected to be operational within 1-2 years, leading to a gradual decrease in capital expenditure [5] - The company emphasizes shareholder returns, with anticipated increases in free cash flow as projects come online, aiming to enhance dividend levels while meeting operational funding needs [5]

Investment Highlights - The report highlights significant acceleration in national subsidies recovery for the environmental sector in July-August 2025, with Everbright receiving 2.064 billion yuan, surpassing the 1.534 billion yuan received in the same period of 2024 [1][4] - The solid waste sector has shown improvements in return on equity (ROE) and cash flow, with a 1% increase in revenue and an 8% increase in net profit for the first half of 2025 [5][6] - The report recommends several companies for investment, including Hanlan Environment, Green Power, and Everbright Environment, among others [2] Solid Waste Sector Insights - The solid waste sector's performance in the first half of 2025 includes a 9% increase in operating cash flow, reaching 6.9 billion yuan, and a 24% increase in free cash flow compared to the first half of 2024 [5][6] - The average waste incineration companies saw a 1.8% increase in tonnage output and a 1.2% increase in grid-connected output in the first half of 2025 [5][6] - Companies are expanding their operations and improving efficiency, with notable increases in heating supply rates for several firms [5][6] Water Sector Analysis - The water sector is expected to experience a cash flow turnaround, with a projected increase in free cash flow for companies like Xingrong and Shouchuang starting in 2026 [6] - Price reforms in water services are anticipated to enhance growth and valuation, with recent price adjustments in cities like Guangzhou and Shenzhen [6] Sanitation Sector Developments - The penetration rate of electric sanitation vehicles is accelerating, with a 77.6% increase in sales of new energy sanitation vehicles in the first seven months of 2025 [7][8] - The report notes a significant rise in the number of automated sanitation projects, indicating a growing trend towards automation in the sector [7][8] Industry Tracking - The report tracks the performance of various sectors, including the increase in sales of sanitation vehicles and the profitability of biodiesel production, with a notable rise in the price of used cooking oil [8] - Lithium battery recycling is also highlighted, with improvements in profitability due to changes in pricing for lithium and cobalt [8]

Investment Rating - The report maintains a positive outlook on the power and gas sectors, recommending various companies within these industries for investment [5][14]. Core Insights - The report highlights the competitive results of the electricity pricing mechanism in Shandong, indicating that wind power is favored over solar power, with wind power pricing at 0.319 CNY/kWh and solar at 0.225 CNY/kWh [9][10]. - A new pricing mechanism for nearby consumption of renewable energy has been established, clarifying economic responsibilities and allowing renewable projects to pay for supply reliability [12][13]. - Global gas prices are showing mixed trends, with European and Asian prices rising while U.S. prices are declining, reflecting varying supply and demand dynamics [15][20]. Summary by Sections 1. Electricity: Shandong Pricing Mechanism and New Renewable Energy Policies - Shandong's first competitive pricing results show wind power projects with a total capacity of 3.5911 GW and a mechanism electricity price of 0.319 CNY/kWh, while solar projects have a capacity of 1.265 GW and a price of 0.225 CNY/kWh [9][11]. - The new pricing mechanism for nearby consumption aims to enhance the utilization of renewable energy and reduce the pressure on the power system [12][13]. 2. Gas: Global Price Variations - As of September 12, U.S. Henry Hub spot prices are at $2.94/mmBtu, down 3.61% week-on-week, while European TTF prices are at €32.00/MWh, up 1.27% [15][16]. - The report notes that U.S. gas production remains high despite a slight decline, while European prices are influenced by supply constraints and increased heating demand due to cooler temperatures [15][20]. 3. Weekly Market Review - The gas sector outperformed the Shanghai and Shenzhen 300 index, while the public utilities, power, and environmental sectors underperformed [36]. 4. Company and Industry Dynamics - Recent announcements include the implementation of market-oriented pricing reforms for renewable energy in Jiangxi province, effective from October 2025 [40]. - The report also discusses various company announcements, including operational updates and financial instruments [43]. 5. Key Company Valuation Tables - The report provides valuation metrics for key companies in the public utility sector, highlighting buy and hold recommendations for several firms based on their earnings and price-to-earnings ratios [45][46].