首创环境(03989) - 2024 - 中期财报

Company Information Company Basic Information Shougang Environment Holdings Limited (stock code 03989) is a Cayman Islands-registered company focused on waste treatment and waste-to-energy - Company registered in Cayman Islands on May 27, 2004, and listed on HKEX main board on July 13, 2006[51] - Main business is waste treatment and waste-to-energy[51] - Company stock code is 03989[2] Management Discussion and Analysis Macroeconomic and Industry Overview China's H1 2024 GDP grew 5%, with unstable recovery; waste incineration declined, while sanitation and site remediation expanded - China's GDP grew by 5% year-on-year in H1 2024, with 5.3% in Q1 and 4.7% in Q2[3] - New waste incineration capacity decreased to 0.58 thousand tons/day, down 75% year-on-year; new investment decreased to RMB 4.2 billion, down 71% year-on-year, both hitting a three-year low[3] - Sanitation market contract value for projects over RMB 10 million reached RMB 93.9 billion, up 14% year-on-year; site remediation business turnover reached RMB 46.6 billion, up 15% year-on-year[3] Group Strategy and Operating Results The Group focused on core environmental protection, strengthening waste-to-energy and developing asset-light businesses, achieving 13.48% net profit growth and 1.5% asset growth despite a 6.38% revenue decline - The Group focuses on its core environmental protection business, continuously strengthening its leading position in waste-to-energy, and actively promoting the development of asset-light businesses such as urban and rural sanitation, site remediation, and energy saving/carbon reduction[4] - The Group has established a diversified "investment + operation + service" value-driven model, achieving a balance between asset-heavy and asset-light operations[5] 2024 H1 Key Operating Results | Indicator | 2024 H1 (RMB billion) | YoY Change | 2023 H1 (RMB billion) | | :--- | :--- | :--- | :--- | | Operating Revenue | 17.87 | -6.38% | 19.08 | | Net Profit Attributable to Owners | 1.71 | +13.48% | 1.50 | | Total Assets (Period-end) | 205.91 | +1.5% (vs. 2023 end) | 202.87 (2023 end) | - Waste-to-energy, urban and rural sanitation, site remediation, and organic solid waste treatment contributed RMB 16.98 billion in operating revenue, accounting for 95.04% of total revenue[5] - The Group has 67 domestic reserve projects with a total investment of approximately RMB 19.783 billion, of which RMB 17.127 billion has been invested[5] - In H1, 5.0416 million tons of domestic waste were processed, 23.1 thousand tons of hazardous waste were processed, and 1.287 billion kWh of on-grid electricity were supplied[6] Significant Achievements in Comprehensive Quality Improvement The Group transitioned 3 projects to commercial operation, adjusted prices for 2, improved capacity utilization to 87%, and saved RMB 14 million through procurement - Qianjiang incineration, Fuzhou kitchen waste, and Gao'an collection and transportation 3 projects successfully transitioned to commercial operation; Puer incineration and Gao'an collection and transportation 2 projects achieved price adjustments[8] - Project capacity utilization increased from 77% to 87%, and the average on-grid electricity per ton of waste for waste-to-energy projects increased by 5.7% compared to last year[8] - Centralized procurement saved RMB 14 million; loan interest rates for multiple projects were reduced, with a maximum decrease of 80 basis points[8] Fruitful Achievements in Innovation and Growth The Group advanced technological innovation with new patents and projects, expanding waste incineration derivative businesses and urban/rural sanitation contracts - Flue gas desulfurization process modification project is progressing rapidly, having entered the trial debugging stage[9] - Completed acceptance for 4 existing research projects, applied for 2 new project initiations, received 4 invention patent applications and 10 utility model applications, and was granted 4 invention patents and 14 utility model patents[9] - Expanded 10 waste incineration derivative business projects, signed 47 contracts with a contract value of approximately RMB 24 million; secured 6 urban and rural sanitation projects with an annual contract value of RMB 69 million[9] - "Key Technologies and Applications for Resource Refinement, Reconstruction, and Graded Directional Conversion of Kitchen Waste" won the Second Prize for Scientific and Technological Progress in Shanghai[9] Significant Effects of System Upgrades The Group improved operational efficiency through system upgrades, refined sanitation management, and explored new areas like waste plastic recycling and new energy heating - Through the excellent operation system construction, key indicators such as power generation, in-plant power consumption rate, and unit efficiency were successfully improved[11] - Actively improved the sanitation business management system, focusing on safety management, operational planning management, human resource management, and organizational capability building[11] - Conducted in-depth research and demonstration on three directions: chemical recycling of waste plastics, new energy heating, and the application of heat pumps in large-scale heating projects[11] Enhanced Safety System The Group fully enhanced its safety management system, achieving 100% responsibility letter signing, and rectified all 265 identified hidden dangers through 10 inspections - All-staff safety objective responsibility letters signing rate reached 100%[12] - Formulated "2024 Safety Production Work Priorities" and "2024 Safety Production Work Plan," and compiled "High and Medium Risk Control List"[12] - Conducted 10 safety inspections, identified and rectified 265 hidden dangers, with a 100% rectification rate[12] Diversified Financing Methods The Group maintains strong relationships with mainstream financial institutions, leveraging favorable policies to reduce financing costs, with total bank credit reaching RMB 10.143 billion in H1 2024 - The Group maintains good cooperative relationships with several mainstream financial institutions, including Bank of China, Industrial and Commercial Bank of China, China Construction Bank, and Postal Savings Bank of China[13] - As of H1 2024, the Group's total outstanding bank credit amounted to RMB 10.143 billion, including RMB 0.5 billion for the headquarters and RMB 9.643 billion for project companies[13] Business Outlook In H2, the Group will prioritize project implementation, focus resources on quality projects, reduce losses and accounts receivable, and enhance overall management driven by improved return on equity - H2 work objectives include promoting project implementation, reducing losses, and reducing accounts receivable[14] - Driven by an increase in return on equity, comprehensively promote the Group's management improvement, focusing on "five major goals" and adopting "four major measures"[14] Financial Review The Group's H1 revenue decreased 6.38% to RMB 1.787 billion, but net profit attributable to owners rose 13.48% to RMB 171 million due to reduced asset impairment, with stable assets and improved current ratio despite lower cash 2024 H1 Financial Performance Overview | Indicator | 2024 H1 (RMB thousand) | 2023 H1 (RMB thousand) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 1,786,721 | 1,908,540 | -6.38% | | Gross Profit Margin | 36.41% | 34.16% | +2.25pp | | Selling and Administrative Expenses | 198,473 | 202,671 | -2.07% | | Net Profit Attributable to Owners | 170,656 | 150,386 | +13.48% | - Revenue decrease primarily due to reduced construction revenue from projects under construction transitioning to commercial operation, and a sharp decline in revenue from the suspended dismantling project[15] - Gross profit margin increase primarily due to increased waste processing volume and continuous improvement in power generation efficiency for some project companies, leading to reduced fixed cost allocation[15] - Net profit attributable to owners increased primarily due to reduced