城发环境(000885) - 2024 Q2 - 季度财报

Important Notice, Table of Contents, and Definitions This section provides essential disclaimers, a table of contents, and definitions of key terms used throughout the report Important Notice The company's management assures the accuracy and completeness of this semi-annual report, clarifying that forward-looking statements do not constitute substantive commitments - The company's Board of Directors, Supervisory Board, and all senior management ensure the truthfulness, accuracy, and completeness of this semi-annual report, clarifying that forward-looking statements regarding development strategies do not constitute substantive commitments[6] - The company's 2024 semi-annual profit distribution plan proposes no cash dividends, no bonus shares, and no capitalization of reserves[6] Definitions This chapter defines specific terms and abbreviations used in the report, covering regulatory bodies, major shareholders, the company, and its dozens of subsidiaries - The company's controlling shareholder is identified as "Henan Investment Group Co., Ltd.," with a comprehensive list of abbreviations and full names for dozens of subsidiaries and affiliated companies mentioned in the report[9][10][11] Company Profile and Key Financial Indicators This section presents the company's fundamental information and a summary of its key financial performance and position for the reporting period Company Profile This chapter provides the company's basic commercial information, including its stock abbreviation "CEVIA Enviro," stock code "000885," full Chinese and English names, and legal representative - Company basic information: CEVIA Enviro Inc., stock code 000885, listed on the Shenzhen Stock Exchange[13] Key Accounting Data and Financial Indicators In the first half of 2024, the company's operating revenue was 2.891 billion yuan, a 10.66% year-on-year decrease, with net profit attributable to shareholders at 490 million yuan, down 17.44% Main Accounting Data and Financial Indicators (Yuan) | Indicator | Current Period | Prior Year Period | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue (Yuan) | 2,891,105,587.53 | 3,236,146,474.97 | -10.66% | | Net Profit Attributable to Shareholders (Yuan) | 490,141,563.31 | 593,649,148.13 | -17.44% | | Net Cash Flow from Operating Activities (Yuan) | 634,573,997.43 | 693,572,009.95 | -8.51% | | Basic Earnings Per Share (Yuan/share) | 0.7634 | 0.9246 | -17.43% | | Weighted Average Return on Net Assets | 6.35% | 8.72% | -2.37% | | Indicator | End of Current Period | End of Prior Year | YoY Change | | Total Assets (Yuan) | 29,583,706,892.28 | 29,128,170,526.36 | 1.56% | | Net Assets Attributable to Shareholders (Yuan) | 7,830,103,972.62 | 7,501,741,588.83 | 4.38% | Non-recurring Gains and Losses (Yuan) | Non-recurring Gain/Loss Item | Amount (Yuan) | | :--- | :--- | | Gain/Loss on Disposal of Non-current Assets | 1,000,000.00 | | Government Grants Recognized in Current Profit/Loss | 6,724,739.75 | | Other Non-operating Income/Expenses | 1,313,118.37 | | Less: Income Tax Impact | 1,954,033.16 | | Less: Impact on Minority Interests (After Tax) | 674,474.90 | | Total | 6,409,350.06 | Management Discussion and Analysis This section provides a comprehensive review of the company's operations, financial performance, and strategic initiatives during the reporting period I. Main Businesses During the Reporting Period The company's main businesses span solid waste treatment, environmental sanitation, water treatment, environmental solution integration services, and highway operations, with a shift towards increased environmental operation services - The company's business covers five major segments: - Solid Waste Treatment: Centered on household waste incineration for power generation, synergistically treating kitchen waste, sludge, hazardous waste, and medical waste - Environmental Sanitation Services: Providing integrated urban and rural environmental sanitation services including sweeping, cleaning, waste collection, and waste sorting - Water Treatment: Encompassing water supply, wastewater treatment, and rural wastewater management - Environmental Solution Integration Services: Offering full-cycle solutions including design, equipment, construction, and operation - Highway Operations: Operating 255 kilometers of highways[23][25][26][28][29] Core Production Indicators | Core Production Indicator | H1 2024 | YoY Growth | | :--- | :--- | :--- | | Waste Input (10,000 tons) | 573.2 | 17.86% | | On-grid Power Generation (10,000 kWh) | 140,080 | 16.43% | | External Steam Supply (10,000 tons) | 66.72 | 29.38% | | Wastewater Treatment Volume (10,000 tons) | 5,777.18 | 34.20% | | Water Supply Volume (10,000 tons) | 2,748.94 | 13.03% | | Toll Revenue (10,000 Yuan) | 64,667 | -8.29% | - In market expansion, the company extended front-end environmental sanitation services in waste incineration project locations, winning multiple bids; promoted "City Housekeeper" service solutions; secured new water treatment projects; and actively explored overseas markets[31] II. Analysis of Core Competencies The company's core competencies include a complete industrial chain, efficient project operation management, and stable cash flow from quality road and bridge assets - The company possesses a complete environmental protection industrial chain, from front-end sanitation to end-of-life resource utilization, enabling replicable and scalable full-chain environmental comprehensive governance services[35] - The company has extensive experience in project investment, construction, and operation, with its waste incineration projects operating stably, maintaining good pollutant emission control, and achieving continuous economic benefits[36][37] - Core road and bridge assets totaling 255 kilometers serve as a "ballast" business, providing continuous and stable cash flow for the company's daily operations[38] III. Analysis of Main Business Total revenue decreased by 10.66% year-on-year, with solid waste and sanitation revenue growing by 24.65%, water treatment by 33.18%, while environmental solution integration services significantly declined by 62.92%, indicating a shift towards operational services Main Business Financials (Yuan) | Item | Current Period | Prior Year Period | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 2,891,105,587.53 | 3,236,146,474.97 | -10.66% | | Operating Cost | 1,643,132,882.77 | 1,918,202,630.96 | -14.34% | | Selling Expenses | 13,884,450.99 | 11,233,821.69 | 23.60% | | Financial Expenses | 283,865,101.03 | 266,020,227.28 | 6.71% | | Net Cash Flow from Investing Activities | -821,837,011.92 | -1,410,210,162.80 | -41.49% | | Net Cash Flow from Financing Activities | 37,661,000.88 | 2,066,566,207.94 | -98.18% | Revenue by Business Segment (Yuan) | Business Segment | Operating Revenue (Yuan) | Share of Total Revenue | YoY Change | | :--- | :--- | :--- | :--- | | Solid Waste Treatment and Environmental Sanitation Services | 1,609,097,344.98 | 55.66% | 24.65% | | Environmental Solution Integration Services | 346,148,988.94 | 11.97% | -62.92% | | Water Treatment Services | 186,785,712.70 | 6.46% | 33.18% | | Highway Operations | 641,400,524.38 | 22.19% | -10.28% | V. Analysis of Assets and Liabilities Total assets increased by 1.56% to 29.584 billion yuan, with accounts receivable rising to 10.82% of total assets, while short-term borrowings decreased to 1.79% and long-term borrowings remained the largest liability Major Asset and Liability Items (Yuan) | Major Asset/Liability Item | Period-end Amount (Yuan) | Percentage of Total Assets | Change from Prior Year-end | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 1,170,700,363.47 | 3.96% | -0.70% | | Accounts Receivable | 3,202,102,182.26 | 10.82% | 1.84% | | Fixed Assets | 5,094,723,599.06 | 17.22% | -0.68% | | Construction in Progress | 916,933,054.69 | 3.10% | 0.49% | | Short-term Borrowings | 530,451,458.37 | 1.79% | -1.01% | | Long-term Borrowings | 13,388,065,882.27 | 45.25% | 0.55% | VI. Analysis of Investment Status Total investment decreased by 37.62% to 887 million yuan, with 1.62 billion yuan raised through bonds and short-term notes used entirely for debt repayment, consistent with stated purposes - Investment during the reporting period was 887 million yuan, a 37.62% decrease from 1.422 billion yuan in the prior year period[45] Funds Raised and Utilized (10,000 Yuan) | Fundraising Method | Year of Issuance | Total Funds Raised (10,000 Yuan) | Amount Used in Current Period (10,000 Yuan) | Purpose | | :--- | :--- | :--- | :--- | :--- | | Non-public Issuance of Corporate Bonds | 2023 | 50,000 | 50,000 | Repay interest-bearing debt | | Public Issuance of Ultra-short-term Financing Bills | 2023 | 40,000 | 40,000 | Repay interest-bearing debt | | Public Issuance of Ultra-short-term Financing Bills | 2024 | 47,000 | 47,000 | Repay interest-bearing debt | | Public Issuance of Ultra-short-term Financing Bills | 2024 | 25,000 | 25,000 | Repay interest-bearing debt | | Total | -- | 162,000 | 162,000 | -- | VIII. Analysis of Major Holding and Participating Companies Henan Xupingnan Expressway Co., Ltd. was a significant profit contributor with 221 million yuan in net profit, and the company expanded its business by adding nine new subsidiaries in urban services and environmental sectors Major Holding/Participating Companies (Yuan) | Company Name | Type | Main Business | Operating Revenue (Yuan) | Net Profit (Yuan) | | :--- | :--- | :--- | :--- | :--- | | Henan Xupingnan Expressway Co., Ltd. | Subsidiary | Highway development, operation | 665,016,923.41 | 221,451,997.40 | | CEVIA Water Co., Ltd. | Subsidiary | Water supply, wastewater treatment | 260,516,487.11 | 45,389,229.47 | | Zhengzhou Zero Carbon Technology Co., Ltd. | Subsidiary | Industrial park investment, construction, operation | 401,661,373.78 | 74,343,120.12 | - During the reporting period, the company expanded its business by establishing five new subsidiaries and acquiring four, including CEVIA Water (Gushi) Co., Ltd. and Henan CEVIA Sound Environmental Development Co., Ltd., respectively[52] X. Risks Faced by the Company and Countermeasures The company faces three main risks: environmental policy changes, intensified market competition in solid waste and water sectors, and increased accounts receivable due to local government fiscal pressure - Policy Change Risk: The environmental protection industry is closely linked to national strategies, and policy adjustments may adversely affect the company's operations[53] - Increased Industry Competition Risk: Central state-owned enterprises, local state-owned enterprises, and private capital are entering the solid waste and water sectors, intensifying market competition and potentially increasing the difficulty for the company to secure new projects[54] - Accounts Receivable Increase Risk: The company's government-paid business accounts for a significant proportion, and local government fiscal payment capacity is under pressure, leading to extended collection cycles and impacting the company's asset liquidity and operational efficiency[55] Corporate Governance This section details the company's governance structure, including shareholder meetings and changes in its board of directors and senior management Shareholders' Meeting Information The company held one annual general meeting and three extraordinary general meetings during the reporting period, with investor participation consistently above 66% Shareholders' Meeting Information | Meeting Session | Meeting Type | Investor Participation Rate | Meeting Date | | :--- | :--- | :--- | :--- | | First Extraordinary General Meeting of 2024 | Extraordinary General Meeting | 67.32% | February 27, 2024 | | Second Extraordinary General Meeting of 2024 | Extraordinary General Meeting | 67.02% | April 02, 2024 | | 2023 Annual General Meeting | Annual General Meeting | 67.39% | May 22, 2024 | | Third Extraordinary General Meeting of 2024 | Extraordinary General Meeting | 66.77% | June 21, 2024 | Changes in Directors, Supervisors, and Senior Management During the reporting period, Mr. An Rujie was elected as an employee representative director, and Mr. Li Jun resigned as deputy general manager due to work changes - Mr. An Rujie was elected as an employee representative director of the company's seventh Board of Directors on January 19, 2024[58] - Mr. Li Jun resigned from his position as deputy general manager on May 29, 2024, due to work changes[58] Environmental and Social Responsibility This section outlines the company's commitment to environmental protection, including compliance with regulations, and its efforts in social responsibility, such as protecting shareholder and employee rights I. Significant Environmental Issues The company and its subsidiaries are designated key polluting units, strictly adhering to environmental laws, with detailed disclosures confirming no exceedances in pollutant emissions - The company and its subsidiaries are designated key polluting units by environmental protection authorities, with operations strictly adhering to national and local environmental laws and standards, including the Environmental Protection Law[60] - The report extensively details the emission concentrations, total emissions, and approved limits for major pollutants (e.g., particulate matter, sulfur dioxide, COD) from wastewater and exhaust gas across dozens of subsidiaries, confirming no exceedances for any unit[61][62][63] - The company has developed and filed an "Emergency Response Plan for Environmental Incidents," with environmental facilities operating normally during the reporting period, and approximately 20,000 yuan in environmental protection tax paid[81][82] II. Social Responsibility The company protects shareholder rights through compliant disclosure and stable dividends, supports employee development with market-based compensation and training, and promotes green development through energy and water conservation - Shareholder Rights Protection: Strict adherence to legal information disclosure, engaging with investors through performance briefings and interactive platforms, and completing the 2023 equity distribution of 2.52 yuan (tax inclusive) per 10 shares[85] - Employee Rights Protection: Implementation of a market-based compensation mechanism, advancement of the HR "three-pillar" model, execution of the "Latent Dragon Program" talent inventory, and organization of various training and cultural activities[86] - Environmental Protection: Adherence to green development principles, strict compliance with environmental regulations, vigorous promotion of energy and water conservation projects, enhancement of resource utilization, and reduction of operational resource consumption[87] Significant Matters This section covers key events and commitments, including the fulfillment of shareholder pledges, related party transactions, significant guarantees, and other material developments Commitments The controlling shareholder, Henan Investment Group Co., Ltd., fulfilled its voluntary commitment not to reduce its shareholding for six months, which ended on March 20, 2024 - The controlling shareholder, Henan Investment Group Co., Ltd., has fulfilled its commitment not to reduce its shareholding in the listed company by any means for six months starting from September 20, 2023[88] Significant Related Party Transactions The company engaged in various daily operational related party transactions with entities under common control, including procurement, sales, services, and leasing, all at market prices within approved annual limits - The company engaged in extensive daily operational related party transactions with multiple affiliates, primarily subsidiaries of Henan Investment Group, covering material procurement, power purchasing, engineering services, property services, and asset leasing, all conducted at market prices[92][93][94] Significant Guarantees As of the reporting period end, total actual guarantees amounted to 1.707 billion yuan, representing 21.80% of net assets, including a 1.5 billion yuan guarantee for the controlling shareholder Summary of Guarantees (10,000 Yuan) | Guarantee Summary | Amount (10,000 Yuan) | | :--- | :--- | | Total Actual Guarantee Balance at Period-end | 170,692.8 | | Percentage of Company's Net Assets | 21.80% | | Of which: Guarantees for Shareholders, Actual Controllers, and Affiliates | 150,000 | Explanation of Other Significant Matters The company successfully issued two ultra-short-term financing bills totaling 720 million yuan and decided to terminate its convertible bond issuance plan, withdrawing related application documents - The company successfully issued two ultra-short-term financing bills in April and May 2024, totaling 470 million yuan (at 2.2% interest) and 250 million yuan (at 1.99% interest), respectively[119] - On May 23, 2024, the company decided to terminate the issuance of convertible corporate bonds to unspecified investors and applied to the Shenzhen Stock Exchange to withdraw related application documents[121] Share Changes and Shareholder Information This section details the company's share capital structure and the composition of its shareholder base during the reporting period I. Share Change Information The company's total share capital and share structure remained unchanged during the reporting period, with 642,078,255 shares, all unrestricted tradable shares - As of the end of the reporting period, the company's total share capital was 642,078,255 shares, with no changes during the period[123] III. Number of Shareholders and Shareholding Information As of June 30, 2024, the company had 23,215 common shareholders, with Henan Investment Group Co., Ltd. as the largest shareholder at 56.47% Shareholder Information | Shareholder Name | Shareholder Type | Shareholding Percentage | Number of Shares Held | | :--- | :--- | :--- | :--- | | Henan Investment Group Co., Ltd. | State-owned Legal Person | 56.47% | 362,579,146 | | China United Cement Group Co., Ltd. | State-owned Legal Person | 9.72% | 62,400,000 | | Great Wall Life Insurance Co., Ltd. - Own Funds | Other | 6.00% | 38,525,278 | | Xinxiang Economic Investment Co., Ltd. | State-owned Legal Person | 0.81% | 5,217,099 | | Hong Kong Securities Clearing Company Limited | Overseas Legal Person | 0.73% | 4,688,671 | Preferred Shares Information This section confirms that the company had no preferred shares outstanding during the reporting period Preferred Shares Information The company had no preferred shares during the reporting period - The company had no preferred shares during the reporting period[129] Bond-Related Information This section provides details on the company's outstanding corporate bonds and non-financial enterprise debt financing instruments II. Corporate Bonds As of the reporting period end, the company had outstanding bonds including a 500 million yuan non-public corporate bond and two ultra-short-term financing bills totaling 720 million yuan Corporate Bonds (10,000 Yuan) | Bond Abbreviation | Bond Code | Maturity Date | Bond Balance (10,000 Yuan) | Interest Rate | | :--- | :--- | :--- | :--- | :--- | | 23 CEVIA D1 | 133645.SZ | September 4, 2024 | 50,000 | 2.8% | Non-financial Enterprise Debt Financing Instruments (10,000 Yuan) | Bond Abbreviation | Bond Code | Maturity Date | Bond Balance (10,000 Yuan) | Interest Rate | | :--- | :--- | :--- | :--- | :--- | | 24 CEVIA Enviro SCP001 | 012481464.IB | January 21, 2025 | 47,000 | 2.2% | | 24 CEVIA Enviro SCP002 | 012481707.IB | February 25, 2025 | 25,000 | 1.99% | VI. Key Accounting Data and Financial Indicators for the Past Two Years as of the End of the Reporting Period The company's liquidity and quick ratios improved, while the asset-liability ratio slightly decreased, but the interest coverage ratio declined, indicating weakened short-term solvency Key Financial Indicators (%) | Item | End of Current Period/Current Period | End of Prior Year/Prior Year Period | Change | | :--- | :--- | :--- | :--- | | Current Ratio | 0.99 | 0.86 | 15.12% | | Asset-Liability Ratio | 69.81% | 70.87% | -1.06% | | Interest Coverage Ratio | 3.41 | 3.92 | -13.01% | | EBITDA Interest Coverage Ratio | 5.3 | 5.61 | -5.53% | Financial Report This section contains the company's unaudited semi-annual consolidated and parent company financial statements, along with detailed notes on accounting policies and major items II. Financial Statements This chapter includes the company's unaudited 2024 semi-annual consolidated and parent company financial statements, specifically the balance sheet, income statement, cash flow statement, and statement of changes in owners' equity - The company's 2024 semi-annual financial report is unaudited[134] - This section provides detailed financial statements, including: Consolidated Balance Sheet, Consolidated Income Statement, Consolidated Cash Flow Statement, and Consolidated Statement of Changes in Owners' Equity[135][142][147] III. Company Overview The notes detail the company's overview, financial statement preparation basis, significant accounting policies, and annotations for major consolidated financial statement items, including taxes, segment information, and related parties - The company's primary business scope includes investment, operation, and management of environmental and public utility projects, waste-to-energy, water pollution control, and investment, construction, and operation of highways and municipal infrastructure[163] - The company benefits from multiple tax incentives, including: simplified 3% tax for highway tolls; VAT immediate refund or exemption for waste-to-energy, waste treatment, sludge disposal, and wastewater treatment; "three-year exemption, three-year half reduction" corporate income tax for eligible environmental projects; and a 15% corporate income tax rate for certain high-tech subsidiaries[235][236][237] - During the reporting period, the company expanded its environmental sanitation business by acquiring Henan CEVIA Sound Environmental Development Co., Ltd. and its three subsidiaries through non-common control business combinations[349][350]