光大环境(00257) - 2025 - 中期业绩

Executive Summary The company's key financial indicators for H1 2025 show a decrease in revenue and profit, but an increase in interim dividend per share Key Financial Indicators for H1 2025 | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | 14,303,933 | 15,612,133 | -8% | | Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) | 6,047,957 | 6,550,295 | -8% | | Profit Before Taxation | 3,702,974 | 3,883,226 | -5% | | Profit Attributable to Equity Holders of the Company | 2,206,751 | 2,453,917 | -10% | | Interim Dividend Per Share | 15.0 HK cents | 14.0 HK cents | +7.14% | Consolidated Statement of Profit or Loss The consolidated statement of profit or loss for H1 2025 shows a decrease in revenue and profit attributable to equity holders Key Data from Consolidated Statement of Profit or Loss for H1 2025 | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Revenue | 14,303,933 | 15,612,133 | | Gross Profit | 6,330,963 | 6,046,025 | | Profit from Operations | 4,957,123 | 5,441,810 | | Profit Before Taxation | 3,702,974 | 3,883,226 | | Profit for the Period | 2,780,152 | 3,002,217 | | Profit Attributable to Equity Holders of the Company | 2,206,751 | 2,453,917 | | Basic and Diluted Earnings Per Share | 35.92 HK cents | 39.95 HK cents | Consolidated Statement of Comprehensive Income The consolidated statement of comprehensive income for H1 2025 reflects a significant increase in total comprehensive income due to foreign exchange differences Key Data from Consolidated Statement of Comprehensive Income for H1 2025 | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Profit for the Period | 2,780,152 | 3,002,217 | | Exchange Differences Arising from Translation of Overseas Operations | 1,918,650 | (826,694) | | Total Comprehensive Income for the Period | 4,608,342 | 2,329,540 | | Total Comprehensive Income Attributable to Equity Holders of the Company | 3,718,487 | 1,867,081 | - In H1 2025, the Group recorded a positive exchange difference of HKD 1,918,650 thousands from the translation of overseas operations, compared to a negative HKD 826,694 thousands in H1 2024, leading to a significant increase in total comprehensive income for the period[7] Consolidated Statement of Financial Position The consolidated statement of financial position as of June 30, 2025, shows growth in total assets and net assets compared to year-end 2024 Key Data from Consolidated Statement of Financial Position as of June 30, 2025 | Indicator | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Total Non-Current Assets | 140,189,080 | 138,252,572 | | Total Current Assets | 52,039,896 | 47,774,452 | | Total Current Liabilities | 40,617,862 | 35,731,838 | | Total Non-Current Liabilities | 81,071,913 | 83,878,610 | | Net Assets | 70,539,201 | 66,416,576 | | Total Equity | 70,539,201 | 66,416,576 | - As of June 30, 2025, the Group's total assets reached HKD 192,228,976 thousands, and net assets were HKD 70,539,201 thousands, showing an increase from year-end 2024[8][9] Notes to the Interim Financial Information 1. Basis of Preparation This interim financial information is prepared in accordance with HKAS 34 and Appendix D2 of the Listing Rules, using consistent accounting policies with 2024, except for new standards - Interim financial information is prepared in accordance with HKAS 34 and Appendix D2 of the Listing Rules, and has been reviewed by KPMG[3][10] - The basis of preparation is consistent with the 2024 annual financial statements, with the adoption of new and revised HKFRSs effective for the current period[10] 2. Changes in Accounting Policies The Group applied HKAS 21 amendment on exchange rate changes, but it had no material impact on interim financial reporting due to no relevant foreign currency transactions - The Group has applied the amendment to HKAS 21, 'The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability', but it had no material impact due to no relevant transactions[12] - No new standards or interpretations not yet effective have been adopted in the current accounting period[13] 3. Operating Segment Information The Group's business is divided into Environmental Energy, Environmental Water, Green Environmental Protection, and Other segments, managed and assessed based on their performance, assets, and liabilities, with segment results presented as 'Adjusted EBITDA' 3.(i) Segment Results, Assets and Liabilities In H1 2025, Environmental Energy project construction and operation segment saw increased revenue and EBITDA, while Environmental Water and Green Environmental Protection project revenues slightly decreased, though Green Environmental Protection's EBITDA grew, and all segments experienced asset and liability growth Revenue from External Customers by Segment for H1 2025 | Segment | 2025 (HKD thousands) | 2024 (HKD thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Environmental Energy Project Construction and Operation | 7,474,299 | 8,487,864 | -12% | | Environmental Water Project Construction and Operation | 3,273,854 | 3,352,595 | -2% | | Green Environmental Protection Project Construction and Operation | 3,399,409 | 3,504,102 | -3% | | Others | 156,371 | 267,572 | -42% | | Total | 14,303,933 | 15,612,133 | -8% | Profit by Segment (Adjusted EBITDA) for H1 2025 | Segment | 2025 (HKD thousands) | 2024 (HKD thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Environmental Energy Project Construction and Operation | 4,237,222 | 4,015,260 | +6% | | Environmental Water Project Construction and Operation | 1,192,208 | 1,199,661 | -1% | | Green Environmental Protection Project Construction and Operation | 987,264 | 1,108,460 | -11% | | Others | 52,852 | 35,656 | +48% | | Total | 6,469,546 | 6,359,037 | +2% | Segment Assets and Liabilities as of June 30, 2025 | Segment | Assets as of June 30, 2025 (HKD thousands) | Assets as of December 31, 2024 (HKD thousands) | Liabilities as of June 30, 2025 (HKD thousands) | Liabilities as of December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | :--- | :--- | | Environmental Energy Projects | 107,863,604 | 105,640,806 | 49,588,423 | 48,801,680 | | Environmental Water Projects | 37,926,832 | 35,609,199 | 23,386,602 | 21,968,288 | | Green Environmental Protection Projects | 37,688,580 | 36,281,922 | 25,232,274 | 24,668,671 | | Others | 2,121,537 | 2,677,463 | 1,661,042 | 1,909,325 | | Total | 185,600,553 | 180,209,390 | 99,868,341 | 97,347,964 | 3.(ii) Information about Major Customers In H1 2025 and 2024, revenue from the Group's largest customer did not exceed 10% of total revenue - Revenue from the Group's largest customer accounted for less than 10% of total revenue[21] 4. Revenue In H1 2025, the Group's total revenue was HKD 14,303,933 thousands, an 8% year-on-year decrease, with operating service revenue increasing by 5% and construction service revenue decreasing by 49% Revenue Analysis for H1 2025 | Revenue Category | 2025 (HKD thousands) | 2024 (HKD thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Environmental Energy Project Construction Service Revenue | 538,839 | 1,790,227 | -70% | | Environmental Water Project Construction Service Revenue | 1,238,151 | 1,487,009 | -17% | | Green Environmental Protection Project Construction Service Revenue | 46,488 | 178,507 | -74% | | Environmental Energy Project Operation Service Revenue | 5,141,935 | 4,860,974 | +6% | | Environmental Water Project Operation Service Revenue | 1,476,891 | 1,301,259 | +13% | | Green Environmental Protection Project Operation Service Revenue | 3,188,898 | 3,157,512 | +1% | | Others | 156,371 | 267,572 | -42% | | Total Revenue from Contracts with Customers | 11,787,573 | 13,043,060 | -10% | | Finance Income from Service Concession Arrangements | 2,516,360 | 2,569,073 | -2% | | Total Revenue | 14,303,933 | 15,612,133 | -8% | - Operating service revenue accounted for 70% of total revenue, construction service revenue for 13%, and finance income for 17%[45] - Total revenue from environmental projects and finance income from local Chinese government agencies was HKD 12,614,382 thousands, a year-on-year decrease of 5.4%[22] 5. Profit Before Taxation In H1 2025, the Group's profit before taxation was HKD 3,702,974 thousands, a 5% year-on-year decrease, with impairment losses on goodwill and property, plant and equipment recognized, and a net exchange gain of HKD 428,008 thousands recorded Items Deducted/Credited to Profit Before Taxation for H1 2025 | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Depreciation – Property, Plant and Equipment | 328,746 | 347,007 | | Amortisation of Intangible Assets | 730,329 | 739,877 | | Government Grants | (33,142) | (36,008) | | VAT Refunds | (353,651) | (208,618) | | Net Expected Credit Losses on Trade Receivables | 193,423 | 20,140 | | Impairment Loss on Goodwill | 65,816 | – | | Impairment Loss on Property, Plant and Equipment | 112,563 | – | | Employee Benefit Expenses | 1,676,619 | 1,714,503 | | Net Exchange Differences | 428,008 | (230,981) | - Impairment loss on property, plant and equipment of HKD 112,563 thousands was recognized due to the cessation of operations of certain hazardous and solid waste treatment projects[23] - VAT refunds significantly increased to HKD 353,651 thousands, indicating government support for environmental projects[23] 6. Finance Costs In H1 2025, the Group's total finance costs were HKD 1,249,303 thousands, a 19% year-on-year decrease, primarily due to lower interest on bank and other borrowings Finance Costs for H1 2025 | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Interest on Bank and Other Borrowings | 853,396 | 1,217,407 | | Interest on Corporate Bonds, Asset-Backed Securities and Medium Term Notes | 369,730 | 326,485 | | Interest on Lease Liabilities | 2,548 | 2,592 | | Asset-Backed Note Arrangement Fees | 23,891 | 3,429 | | Less: Interest Expense Capitalised in Construction in Progress | (262) | (2,596) | | Total | 1,249,303 | 1,547,317 | - The annual interest rate for capitalised borrowing costs ranged from 2.13% to 3.50%, lower than 2.65% to 4.48% in the prior corresponding period[24] 7. Income Tax In H1 2025, the Group's total income tax expense was HKD 922,822 thousands, an increase from H1 2024, with no Hong Kong profits tax provision and Chinese operations taxed at 25%, some enjoying preferential rates Income Tax Expense for H1 2025 | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Current Period Provision | 888,854 | 645,306 | | Under/(Over) Provision in Prior Periods | 8,916 | (18,490) | | Deferred | 25,052 | 254,193 | | Total Tax Expense for the Period | 922,822 | 881,009 | - Certain Chinese subsidiaries are subject to a 50% reduction in the standard tax rate or are fully exempt from income tax[25] 8. Dividends The Board declared an interim dividend of 15.0 HK cents per share for H1 2025, higher than 14.0 HK cents in H1 2024, totaling HKD 921,446 thousands Dividend Distribution for H1 2025 | Dividend Type | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Interim Dividend – 15.0 HK cents per ordinary share | 921,446 | 860,017 | | Final Dividend for Previous Financial Year – 9.0 HK cents per ordinary share | 552,868 | 491,438 | - Interim dividend of 15.0 HK cents per share, an increase of 1 HK cent compared to the prior corresponding period[4][28] 9. Earnings Per Share Attributable to Equity Holders of the Company In H1 2025, basic earnings per share attributable to equity holders was 35.92 HK cents, lower than 39.95 HK cents in H1 2024, mainly due to decreased profit attributable to equity holders Earnings Per Share for H1 2025 | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit Attributable to Equity Holders of the Company (HKD thousands) | 2,206,751 | 2,453,917 | | Number of Ordinary Shares in Issue | 6,142,975,292 | 6,142,975,292 | | Basic and Diluted Earnings Per Share (HK cents) | 35.92 | 39.95 | - The Group had no ordinary shares with potential dilutive effects in issue during H1 2025 and H1 2024[29] 10. Contract Assets As of June 30, 2025, the Group's total contract assets were HKD 109,523,100 thousands, an increase from year-end 2024, primarily comprising service concession arrangement assets and unbilled renewable energy tariff subsidies Composition of Contract Assets as of June 30, 2025 | Item | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Service Concession Arrangement Assets | 103,153,387 | 101,679,370 | | Unbilled Renewable Energy Tariff Subsidies | 6,002,721 | 5,200,296 | | Other Contract Assets | 522,625 | 518,122 | | Less: Loss Allowance | (155,633) | (115,911) | | Total | 109,523,100 | 107,281,877 | - Service concession arrangement assets accrue interest at annual rates ranging from 3.85% to 7.83%, with HKD 94,652,392 thousands related to BOT, BOO, and TOT arrangements already in operation[31] - All current portions of service concession arrangement assets are expected to be recovered within one year[32] 11. Trade and Other Receivables, Deposits and Prepayments As of June 30, 2025, the Group's total trade and other receivables, deposits, and prepayments were HKD 29,163,611 thousands, with HKD 27,064,842 thousands being current, and receivables over thirteen months constituting the largest portion Trade and Other Receivables, Deposits and Prepayments as of June 30, 2025 | Item | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Trade Receivables, Net of Loss Allowance | 23,843,812 | 21,126,596 | | Other Receivables, Deposits and Prepayments, Net of Loss Allowance | 5,319,799 | 5,498,619 | | Total | 29,163,611 | 26,625,215 | | Current Portion | 27,064,842 | 24,713,884 | Ageing Analysis of Trade Receivables as of June 30, 2025 | Ageing | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Not more than one month | 2,816,028 | 2,459,066 | | Over thirteen months | 11,459,574 | 9,875,977 | - Trade receivables primarily arise from operating services for environmental energy, environmental water, green environmental protection projects, and equipment construction and installation services for environmental projects[37] 12. Trade and Other Payables and Accruals As of June 30, 2025, the Group's total trade and other payables and accruals were HKD 16,776,642 thousands, with HKD 16,035,569 thousands being current, and construction payables amounting to HKD 7,412,189 thousands Trade and Other Payables and Accruals as of June 30, 2025 | Item | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Trade Payables | 11,319,089 | 11,382,917 | | Other Payables, Accruals and Deferred Income – Government Grants | 5,457,553 | 5,713,321 | | Total | 16,776,642 | 17,096,238 | | Current Portion | 16,035,569 | 16,372,025 | Ageing Analysis of Trade Payables as of June 30, 2025 | Ageing | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Not more than six months | 8,273,329 | 9,264,576 | | Over six months | 3,045,760 | 2,118,341 | - Trade payables include construction payables under BOT, BOO, and TOT arrangements of HKD 7,412,189 thousands[41] Business Review and Outlook Operating Performance In H1 2025, the Group maintained stable operating performance with an 8% decrease in revenue and a 10% decrease in profit attributable to equity holders, while optimizing financing and declaring an interim dividend Business Overview The Group's H1 2025 revenue was HKD 14,303,933 thousands, an 8% year-on-year decrease, with operating service revenue up 5% and construction service revenue down 49% - The Group adheres to the 'seeking progress while maintaining stability, promoting stability through practical actions' principle, actively implementing the 'Two Modernizations and One Type' (technological, international, ecological) development strategy, and fully advancing its 'Second Entrepreneurship'[43] Key Operating Performance Indicators for H1 2025 | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | Percentage Change | | :--- | :--- | :--- | :--- | | Revenue | 14,303,933 | 15,612,133 | -8% | | Earnings Before Interest, Tax, Depreciation and Amortisation | 6,047,957 | 6,550,295 | -8% | | Profit Attributable to Equity Holders of the Company | 2,206,751 | 2,453,917 | -10% | | Basic Earnings Per Share (HK cents) | 35.92 | 39.95 | -10% | - Operating service revenue was HKD 9,943,304 thousands, a 5% year-on-year increase; construction service revenue was HKD 1,844,269 thousands, a 49% year-on-year decrease[45] Financing Arrangements The Group diversified financing channels, optimizing its structure by issuing medium-term notes and asset-backed securities, maintaining low comprehensive funding costs, and holding HKD 8.842 billion in cash as of June 30, 2025 - The Group and its listed subsidiaries successfully issued medium-term notes and asset-backed securities, optimizing the financing instrument structure[45] - In H1 2025, approximately RMB 50 million in various government grants were received[45] - As of June 30, 2025, the Group held HKD 8.842 billion in cash, indicating a healthy financial position[45] Key Financing Arrangements for H1 2025 | Issue Date | Financing Arrangement and Use of Proceeds | Issue Size (RMB) | | :--- | :--- | :--- | | January 2025 | Everbright Water issued the first tranche of medium-term notes | 1.5 billion | | January 2025 | Everbright Greentech issued the first tranche of carbon-neutral green asset-backed securities | 0.653 billion | | April 2025 | The Company issued the first tranche of perpetual medium-term notes | 1.5 billion | | June 2025 | Everbright Environmental (China) Limited issued the first tranche of technology innovation bonds | 1 billion | Corporate Governance and Dividends The Board declared an interim dividend of 15.0 HK cents per share, a 42% payout ratio, up 7 percentage points year-on-year, while enhancing corporate governance, board diversity, and establishing a Sustainability Committee - Interim dividend of 15.0 HK cents per share, with a payout ratio of 42%, an increase of 7 percentage points compared to H1 2024[49] - Appointed Ms. Qu Li as Non-executive Director and Professor Zhang Xiang as Independent Non-executive Director, enhancing board diversity[49] - Established a Sustainability Committee under the Board and implemented President's Office Meeting and Special Management Meeting mechanisms[49] Business Presence and Projects As of June 30, 2025, the Group's operations spanned 229 cities/counties in 25 Chinese provinces and 16 overseas countries, with 604 environmental projects totaling approximately RMB 164.307 billion in investment, including 4 new projects and several light-asset contracts in H1 - Business presence in 229 cities/counties across 25 provinces (municipalities), autonomous regions in China, and overseas markets in 16 countries including Germany, Poland, Vietnam, and Uzbekistan[50] - Invested in 604 environmental projects, with a total investment of approximately RMB 164.307 billion[50] Design Treatment and Supply Capacity of Major Business Categories as of June 30, 2025 | Project Category | Design Treatment/Supply Capacity | | :--- | :--- | | Municipal Solid Waste | 162,900 tonnes/day | | Food Waste and Kitchen Waste | 8,743 tonnes/day | | Water Treatment and Supply | 7,618,600 cubic meters/day | | Biomass Raw Materials | 8,259,800 tonnes/year | | Steam and Heat Supply | 8,217,495 tonnes/year | | Photovoltaic Power Generation, Wind Power Generation | 272.12 MW | | Energy Storage Capacity | 22.20 MW | - In H1, 4 new projects were invested, with a total investment of approximately RMB 2.396 billion; new light-asset business contracts totaled approximately RMB 520 million[52] - Breakthrough in Central Asian solid waste treatment market with two waste-to-energy projects in Uzbekistan; plans to establish representative offices in Indonesia, Vietnam, Central Asia, and other regions[51] Innovation Empowerment The Group established a comprehensive R&D system, focusing on '3+1' key research topics like fly ash resource utilization, successfully commissioning an anaerobic ammonia oxidation system in Zhejiang Ninghai, and achieving international leading levels in anaerobic MBR leachate treatment technology, holding 2,240 authorized intellectual properties as of June 30, 2025 - Established a comprehensive R&D institutional system, revising core policies such as the 'Science and Technology Expense Management Measures'[53] - China's first waste-to-energy project anaerobic ammonia oxidation system successfully commissioned at Zhejiang Ninghai waste-to-energy project[53] - Anaerobic Membrane Bioreactor (MBR) technology for leachate treatment was assessed to be at an international leading level[53] Authorized Patents and Key Technical Papers Published as of June 30, 2025 | Item | H1 2025 | As of June 30, 2025 (Cumulative) | | :--- | :--- | :--- | | Authorized Intellectual Properties (items) | 91 | 2,240 | | Invention Patents | 35 | 317 | | Utility Model Patents | 50 | 1,530 | | Software Copyrights | 6 | 338 | | Design Patents | – | 55 | | Key Papers Published (articles) | 2 | 104 | Operations Management and Project Construction The Group enhanced operational efficiency through refined management, with Environmental Energy's waste-to-energy output up 3% and plant power consumption down 0.3 percentage points, Environmental Water's sewage treatment volume stable, Green Environmental Protection's biomass fuel acquisition price down 8%, and 7 projects completed and 7 new projects commenced in H1 - Environmental Energy segment's average power generation per tonne of waste incinerated was approximately 460 kWh, a 3% year-on-year increase[56] - Environmental Energy segment's integrated plant power consumption rate was approximately 14.7%, a 0.3 percentage point year-on-year decrease[56] - Environmental Water segment's sewage treatment volume was approximately 835.1 million cubic meters, largely consistent with H1 2024[56] - Green Environmental Protection segment's biomass fuel acquisition unit price decreased by 8% year-on-year[56] - In H1, 7 projects were completed and put into operation, 3 projects were completed; 7 new projects commenced construction[56] Environmental Contribution and Social Responsibility The Group actively promoted energy conservation and emission reduction, treating 28.572 million tonnes of municipal solid waste and providing 14.836 billion kWh of green electricity, reducing COD emissions by 421,000 tonnes in H1 2025, while continuously fulfilling corporate social responsibility through public environmental education, with 226 projects open to the public Key Environmental Contributions for H1 2025 | Treatment Scale | Environmental Contribution | | :--- | :--- | | Municipal solid waste treated: 28,572,000 tonnes | Provided 14,836,000,000 kWh of green electricity; saved 5,935,000 tonnes of standard coal; offset 18,895,000 tonnes of CO2 emissions | | Sewage treated: 835,143,000 cubic meters | Reduced Chemical Oxygen Demand (COD) emissions by 421,000 tonnes | Cumulative Key Environmental Contributions of the Group (since the first project commenced operation in 2005) | Treatment Scale | Environmental Contribution | | :--- | :--- | | Municipal solid waste treated: 355,099,000 tonnes | Provided 173,865,000,000 kWh of green electricity; saved 69,546,000 tonnes of standard coal; offset 144,951,000 tonnes of CO2 emissions | | Sewage treated: 19,079,705,000 cubic meters | Reduced COD emissions by 7,899,000 tonnes | - As of June 30, 2025, the Group had a cumulative total of 226 environmental projects open to the public, receiving approximately 20,000 visitors in H1[57] Awards and Accolades In H1 2025, the Group received numerous domestic and international awards for business operations, sustainable development, and social responsibility, including being featured in 'China's Solutions for Waste Incineration,' winning the 'Golden Lotus Award,' and being listed among 'China's Top Ten Influential Water Enterprises' - The Group was selected as one of the top ten representatives in 'China's Solutions for Waste Incineration' and awarded the 'Golden Lotus Award'[58] - Everbright Water was listed among 'China's Top Ten Influential Water Enterprises' for the eighth consecutive year[58] - Self-developed water-cooled grate complete equipment and battery recycling resource utilization complete equipment were selected for the 'First (Set) Major Technical Equipment Insurance Compensation Project'[60] - The Group's Zhejiang Quzhou waste-to-energy project was awarded the 'National AAA-level Municipal Solid Waste Incineration Plant' honor, becoming the 20th project of the Group to receive this title[61] - The Group was included in 'The Sustainability Yearbook' (eighth time) and 'The Sustainability Yearbook (China Edition)' (third consecutive year)[65] - Multiple projects of the Group were included in the 'National List of Open Environmental Facilities and Urban Sewage and Waste Treatment Facilities' and the 'List of Youth Ecological Civilization Education Practice Venues'[67] Environmental Energy Environmental Energy, a core business segment, contributed HKD 4,237,222 thousands in EBITDA in H1 2025, up 6% year-on-year, and HKD 2,566,785 thousands in profit attributable to the Group, up 12%, achieving a breakthrough in Central Asian solid waste treatment and increasing waste-to-energy output by 3% - Environmental Energy segment contributed HKD 4,237,222 thousands in EBITDA, a 6% year-on-year increase; contributed HKD 2,566,785 thousands in profit attributable to the Group, a 12% year-on-year increase[72] - As of June 30, 2025, 286 projects were invested, with a total investment of approximately RMB 101.228 billion[68] - Achieved a breakthrough in the Central Asian solid waste treatment market with waste-to-energy projects in Fergana and Namangan provinces, Uzbekistan[70] - Waste-to-energy projects generated an average of approximately 460 kWh per tonne of waste incinerated, a 3% year-on-year increase; the integrated plant power consumption rate was approximately 14.7%, a 0.3 percentage point year-on-year decrease[71] Key Operating Data for Environmental Energy in H1 2025 | Indicator | 2025 (tonnes/MWh) | 2024 (tonnes/MWh) | Percentage Change | | :--- | :--- | :--- | :--- | | Waste Treated | 26,498,000 | 25,978,000 | 2% | | Food Waste, Kitchen Waste, Sludge and Other Waste Treated | 4,568,000 | 1,652,000 | 177% | | On-grid Power Generation | 8,859,563 | 8,395,422 | 6% | Environmental Water Environmental Water segment contributed HKD 1,192,208 thousands in EBITDA in H1 2025, a 1% year-on-year decrease, and HKD 408,927 thousands in profit attributable to the Group, a 4% decrease, mainly due to increased exchange losses, while optimizing business layout, expanding light-asset businesses, and operating photovoltaic power generation equipment in 12 projects - Environmental Water segment contributed HKD 1,192,208 thousands in EBITDA, a 1% year-on-year decrease; contributed HKD 408,927 thousands in profit attributable to the Group, a 4% year-on-year decrease[77] - The decrease in profit was primarily due to a year-on-year increase in recognized exchange losses during the review period[77] - As of June 30, 2025, 170 projects were invested, with a total investment of approximately RMB 31.630 billion[74] - New light-asset business contracts totaled approximately RMB 60 million, with an additional design capacity of 10,000 cubic meters/day for industrial wastewater treatment[76] - As of June 30, 2025, photovoltaic power generation equipment in 12 projects commenced operation, with a total installed capacity of approximately 20 MW[76] Key Operating Data for Environmental Water in H1 2025 | Indicator | 2025 (thousand cubic meters) | 2024 (thousand cubic meters) | Percentage Change | | :--- | :--- | :--- | :--- | | Sewage Treated | 835,143 | 835,360 | 0% | | Reclaimed Water Reused | 19,324 | 22,450 | -14% | Green Environmental Protection Green Environmental Protection segment contributed HKD 987,264 thousands in EBITDA in H1 2025, an 11% year-on-year decrease, and HKD 139,484 thousands in profit attributable to the Group, a 30% increase, mainly due to enhanced operational efficiency through refined management, securing its first bio-natural gas project, increasing heat and steam supply by 27%, and reducing biomass fuel acquisition price by 8% - Green Environmental Protection segment contributed HKD 987,264 thousands in EBITDA, an 11% year-on-year decrease; contributed HKD 139,484 thousands in profit attributable to the Group, a 30% year-on-year increase[82] - The increase in profit was primarily due to enhanced operational efficiency and profitability through refined management initiatives[82] - As of June 30, 2025, 143 projects were invested, with a total investment of approximately RMB 30.827 billion[79] - Secured its first bio-natural gas project, marking a significant breakthrough in high-value biomass utilization[80] - Heat and steam supply from related projects increased by approximately 27% year-on-year; biomass fuel acquisition unit price decreased by 8% year-on-year[81] Key Operating Data for Green Environmental Protection in H1 2025 | Indicator | 2025 (tonnes/MWh) | 2024 (tonnes/MWh) | Percentage Change | | :--- | :--- | :--- | :--- | | Waste Treated | 2,074,000 | 2,057,000 | 1% | | Biomass Raw Materials Treated | 3,742,000 | 3,883,000 | -4% | | Hazardous and Solid Waste Disposed | 240,000 | 247,000 | -3% | | Steam Supplied | 2,176,000 | 1,707,000 | 27% | | On-grid Power Generation | 3,426,000 | 3,335,000 | 3% | Equipment Manufacturing The Equipment Manufacturing segment continued to deepen its presence in the domestic market and expand overseas, signing 8 export contracts for complete sets of equipment totaling approximately RMB 112 million in H1, with its self-developed fly ash low-temperature pyrolysis and water washing technology gaining authoritative recognition, and small-scale modular solid waste incineration technology rated as internationally advanced - Continued to deepen its presence in the domestic market and expand overseas, signing supply contracts for high-energy incinerators in Thailand and slag removers in India, and winning the bid for the Langkawi Phase I renovation project in Malaysia[84] - In H1, 8 export contracts for complete sets of equipment were signed, with a total contract value of approximately RMB 112 million[85] - Self-developed fly ash low-temperature pyrolysis and water washing technology passed expert review and gained authoritative recognition[86] - 'Small-scale Modular Solid Waste Incineration Technology and Engineering Application' was rated as internationally advanced[86] Environmental Research Institute The Environmental Research Institute, as the Group's engine for scientific research and innovation, steadily advanced '3+1' key R&D directions, including fly ash resource utilization, waste-to-carbon, biomass saccharification, and micro-grate furnace technology, successfully commissioning an anaerobic ammonia oxidation system in Zhejiang Ninghai and promoting the commercialization of multiple technological achievements - Steadily advanced '3+1' key R&D directions, including fly ash resource utilization, waste-to-carbon, biomass saccharification, and micro-grate furnace technology[87] - The anaerobic ammonia oxidation system has been successfully commissioned at the Group's Zhejiang Ninghai waste-to-energy project[87] - Continuously promoted the commercialization of technological achievements such as Automatic Combustion Control (ACC) and Semi-dry Flue Gas Automatic Control (AFC)[87] Outlook The Group aims to become a world-class environmental comprehensive service provider with Chinese characteristics, focusing on annual targets, strategic leadership, employee incentives, and systematic team optimization, while executing strategy, expanding investment, increasing revenue, controlling costs, forward-looking planning, and risk prevention to ensure a successful conclusion to the '14th Five-Year Plan' and a strong start to the '15th Five-Year Plan' - Aims to build a 'world-class environmental comprehensive service provider with Chinese characteristics'[88] - Focus on strategic execution, systematically optimizing the '15th Five-Year Plan' strategic planning, and ensuring the implementation of strategic goals[88] - Strive to increase overseas business contributions, seize M&A opportunities, and expand core businesses[88] - Implement multiple measures to strengthen operational cost reduction and efficiency improvement, cultivate new growth drivers, and promote the construction of technology innovation platforms[88] - Orderly dispose of non-performing assets, vigorously pursue accounts receivable recovery, and strictly and practically ensure safe production[88] Management Discussion and Analysis Financial Position As of June 30, 2025, the Group's total assets were approximately HKD 192,228,976 thousands, net assets HKD 70,539,201 thousands, net asset value per share increased by 7% to HKD 8.412, and the asset-liability ratio decreased by 1 percentage point to 63% Financial Position Overview as of June 30, 2025 | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | 192,228,976 HKD thousands | 186,027,024 HKD thousands | | Net Assets | 70,539,201 HKD thousands | 66,416,576 HKD thousands | | Net Asset Value Per Share Attributable to Equity Holders of the Company | 8.412 HKD | 7.848 HKD | | Asset-Liability Ratio | 63% | 64% | - Net asset value per share attributable to equity holders of the Company increased by 7% compared to year-end 2024[89] Financial Resources The Group maintains a prudent approach to cash and financial management, holding approximately HKD 8,841,584 thousands in cash and bank balances as of June 30, 2025, a 10% increase from year-end 2024, with most cash held in HKD and RMB - As of June 30, 2025, the Group held approximately HKD 8,841,584 thousands in cash and bank balances, a 10% increase from year-end 2024[90] - The majority of the Group's cash and bank balances, approximately 98%, were denominated in HKD and RMB[90] Indebtedness As of June 30, 2025, the Group's total outstanding interest-bearing borrowings were approximately HKD 93,490,211 thousands, a 2% increase from year-end 2024, primarily denominated in RMB and mostly at floating interest rates - As of June 30, 2025, total outstanding interest-bearing borrowings were approximately HKD 93,490,211 thousands, a 2% increase from year-end 2024[91] - Borrowings included secured interest-bearing borrowings of HKD 38,896,560 thousands and unsecured interest-bearing borrowings of HKD 54,593,651 thousands[91] - The Group's bank facilities amounted to HKD 97,417,565 thousands, of which HKD 33,447,256 thousands remained unutilized[91] Foreign Exchange Risk The Group's primary operations are in mainland China, with most assets, borrowings, and transactions denominated in RMB, creating a natural hedge, and foreign exchange risk is managed through matching currency borrowings and financial instruments - China is the Group's primary business location, accounting for over 95% of total investment and revenue[92] - The majority of assets, borrowings, and major transactions are denominated in RMB, forming a natural hedge[92] Pledge of Assets As of June 30, 2025, the Group's pledged assets and equity interests in subsidiaries had a total net book value of approximately HKD 101,560,680 thousands, used for certain bank facilities and lease liabilities - Total net book value of pledged assets and equity interests in subsidiaries was approximately HKD 101,560,680 thousands[93] - Pledged assets include certain revenue and receivables under service concession arrangements, bank deposits, property, plant and equipment, right-of-use assets, and equity interests in subsidiaries[93] Commitments As of June 30, 2025, the Group's contractual commitments for construction contracts amounted to HKD 643,430 thousands - Contractual commitments for construction contracts amounted to HKD 643,430 thousands[94] Contingent Liabilities As of June 30, 2025, the Company provided financial guarantees for subsidiaries with a maximum liability of HKD 245,495 thousands, which the Board believes are unlikely to result in claims - The Company provided financial guarantees for subsidiaries, with a maximum liability of HKD 245,495 thousands[95] Internal Management The Group continuously improved its management structure, regularly holding President's Office meetings to review operational management and ensure sustainable development, with clear departmental responsibilities, sound internal control processes, and a commitment to establishing a robust risk management culture to comprehensively strengthen management and control risks - The Group's management regularly holds President's Office meetings to review current operations and management status[96] - The Group is committed to establishing a sound risk management culture and implementing effective risk management models[96] - Continuously upholds 'safe and stable operation, compliant discharge' as the fundamental principle of safety and environmental management, comprehensively investigating and rectifying safety and environmental risks and hidden dangers[97] Human Resources The Group highly values human resource management, strengthening talent development through internal training, social recruitment, overseas recruitment, and campus recruitment, employing approximately 15,000 staff as of June 30, 2025, and offering diverse development platforms and benefits - Strengthened talent development through internal training, social recruitment, overseas recruitment, and campus recruitment[98] - Established Asset Preservation Management Department, Market Development Department, and adjusted the Information and Network Security Leading Group, among others[98] - As of June 30, 2025, the Group employed approximately 15,000 staff in total[99] - Provided cross-segment, cross-regional rotation and internal recruitment opportunities to unleash employee potential[98] Key Risks and Uncertainties The Group continuously advanced risk management, effectively controlling risks related to accounts receivable, environmental compliance and safety management, market competition, policy changes, procurement compliance, operational stability, and personnel allocation - Key risks include accounts receivable risk, environmental compliance and safety management risk, market competition risk, policy change risk, procurement compliance risk, operational stability risk, and personnel allocation risk[100] Environmental and Social Management The Group highly prioritizes environmental and social impacts, establishing a comprehensive safety and environmental management system, strictly adhering to national laws and regulations, and proactively disclosing project emission data and environmental management information to ensure all projects operate in compliance - The Group has established a comprehensive safety and environmental management system and continuously implements relevant management policies[101] - Implemented a full-staff safety production responsibility system, clarifying safety production and environmental management responsibilities and assessment standards[101] - Waste-to-energy project design and operation fully comply with all applicable national environmental regulations and standards, with daily average flue gas online monitoring indicators superior to the EU Industrial Emissions Directive[103] - Proactively discloses project emission data and environmental management information on the company website and links to the National Ministry of Ecology and Environment's automatic monitoring information disclosure platform[103] Corporate Governance Compliance with the Corporate Governance Code The Group adheres to high standards of corporate governance, adopting the Corporate Governance Code in Appendix C1 of the Listing Rules, and complied with all applicable code provisions in H1 2025, except for the Chairman's absence from the AGM due to other important commitments - The Group has adopted the Corporate Governance Code set out in Appendix C1 of the Listing Rules as its corporate governance practices[105] - In H1 2025, the Company complied with all applicable code provisions, except for the Chairman's inability to attend the Annual General Meeting[105] Standard Code for Securities Transactions by Directors The Group adopted the Standard Code for Securities Transactions by Directors of Listed Issuers as guidance, and all directors confirmed compliance during their tenure in H1 2025 - The Group adopted the 'Standard Code for Securities Transactions by Directors of Listed Issuers' as a guide for directors' dealings in the Company's securities[107] - All Directors confirmed compliance with the 'Standard Code' throughout their tenure in H1 2025[107] Interim Dividend The Board declared an interim dividend of 15.0 HK cents per share for the six months ended June 30, 2025, payable on October 20, 2025, to shareholders on record as of September 26, 2025 - The Board declared an interim dividend of 15.0 HK cents per share for the six months ended June 30, 2025[108] - The dividend will be paid on October 20, 2025, to shareholders whose names appear on the Company's register of members on September 26, 2025[108] Closure of Register of Members To determine eligibility for the interim dividend, the Company will suspend share transfer registration from September 24 to September 26, 2025 (both dates inclusive) - To determine shareholders' eligibility for the interim dividend, the Company will suspend share transfer registration from September 24 to September 26, 2025 (both dates inclusive)[109] Purchase, Sale or Redemption of the Company’s Listed Securities In H1 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - In H1 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[110] Review of Interim Financial Results The Company's Audit Committee reviewed the interim financial results for the six months ended June 30, 2025, for Board approval - The Company's Audit Committee has reviewed the Company's interim financial results for the six months ended June 30, 2025, for Board approval[111] Publication of Interim Results and Interim Report This announcement is published on the Company's and HKEX websites, and the 2025 interim report, containing all information required by the Listing Rules, will be published and dispatched to shareholders in due course - This announcement is published on the Company's website and the HKEX website[112] - The 2025 interim report, containing all information required by the Listing Rules, will be published on the Company's and HKEX websites and dispatched to shareholders in due course[112] Board of Directors The Board of Directors comprises two executive directors, two non-executive directors, and three independent non-executive directors - The Board of Directors includes two executive directors (Mr. Wang Silian, Mr. Luan Zusheng), two non-executive directors (Mr. Kang Guoming, Ms. Qu Li), and three independent non-executive directors (Mr. Fan Renhe, Ms. Li Shuxian, Professor Zhang Xiang)[114]