天津创业环保股份(01065) - 2025 - 中期业绩

Important Notice Board of Directors' Statement The company's board of directors, directors, and senior management guarantee the truthfulness, accuracy, and completeness of the interim report content and assume corresponding legal responsibilities, noting this interim financial report is unaudited - The company's board of directors, directors, and senior management guarantee the truthfulness, accuracy, and completeness of the interim report content, with no false records, misleading statements, or major omissions, and assume individual and joint legal responsibilities[4] - The company's interim financial report for the six months ended June 30, 2025, is unaudited[4] Fund Occupancy and Guarantees During the reporting period, the company had no non-operating fund occupancy by controlling shareholders or other related parties, nor did it provide external guarantees in violation of prescribed decision-making procedures - No non-operating fund occupancy by controlling shareholders or other related parties[4] - No external guarantees provided in violation of prescribed decision-making procedures[3] Statement by Persons Responsible for Financial Report Mr. Tang Fusheng, the company's responsible person, Ms. Nie Yanhong, the person in charge of accounting, and Mr. Liu Tao, the head of the accounting department, declare that the financial report in the interim report is true, accurate, and complete - Mr. Tang Fusheng, the company's responsible person, Ms. Nie Yanhong, the person in charge of accounting, and Mr. Liu Tao, the head of the accounting department (accounting supervisor), declare that the financial report in the interim report is true, accurate, and complete[3] Company Profile Brief Introduction to Basic Information Tianjin Ventures Environmental Protection Group Co., Ltd. is listed on both the Shanghai Stock Exchange and the Hong Kong Stock Exchange, with A-share ticker "Chuangye Huanbao" (600874) and H-share ticker "Tianjin Ventures Environmental Protection" (1065), and the report provides detailed contact information for key personnel Company Stock Information | Indicator | A-share | H-share | | :--- | :--- | :--- | | Stock Abbreviation | Chuangye Huanbao | Tianjin Ventures Environmental Protection | | Stock Code | 600874 | 1065 | | Listing Exchange | Shanghai Stock Exchange | Hong Kong Stock Exchange Limited | Company Contact Information | Position | Name | Phone | Email | | :--- | :--- | :--- | :--- | | Board Secretary | Ms. Qi Lipin | 86-22-23930128 | qi_lp@tjcep.com | | Hong Kong Company Secretary | Ms. Cao Errong | 852-21629620 | cosec@tjcep.com | | Securities Affairs Representative | Mr. Zhu Fan | 86-22-23930128 | zhu_fan@tjcep.com | Key Accounting Data and Financial Summary Prepared Under Chinese Accounting Standards In H1 2025, operating revenue slightly decreased by 1.81%, while net profit attributable to shareholders grew by 12.09% and operating cash flow by 17.96%; basic EPS increased by 11.11%, and non-recurring gains totaled RMB 76.53 million, mainly from government subsidies and receivable impairment reversals Key Accounting Data (Jan-Jun 2025 vs. Prior Year Period) | Indicator | Current Reporting Period (Jan-Jun) (RMB) | Prior Year Period (RMB) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 2,177,915,496.72 | 2,218,165,636.41 | -1.81 | | Net Profit Attributable to Company Shareholders | 472,920,534.82 | 421,928,337.30 | 12.09 | | Net Profit Attributable to Company Shareholders (Excluding Non-recurring Gains/Losses) | 396,393,562.39 | 381,680,626.97 | 3.85 | | Net Cash Flow from Operating Activities | 517,864,524.50 | 439,000,213.39 | 17.96 | Period-End Asset and Liability Data (June 30, 2025 vs. Prior Year-End) | Indicator | Current Period-End (RMB) | Prior Year-End (RMB) | Change from Prior Year-End (%) | | :--- | :--- | :--- | :--- | | Net Assets Attributable to Company Shareholders | 9,869,881,582.87 | 9,668,867,730.10 | 2.08 | | Total Assets | 25,448,212,601.55 | 25,154,981,695.71 | 1.17 | Key Financial Indicators (Jan-Jun 2025 vs. Prior Year Period) | Indicator | Current Reporting Period (Jan-Jun) | Prior Year Period | YoY Change (%) | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (RMB/share) | 0.30 | 0.27 | 11.11 | | Diluted Earnings Per Share (RMB/share) | 0.30 | 0.27 | 11.11 | | Basic EPS (Excluding Non-recurring Gains/Losses) (RMB/share) | 0.25 | 0.24 | 4.17 | | Weighted Average Return on Net Assets (%) | 4.80 | 4.58 | 0.22 | | Weighted Average Return on Net Assets (Excluding Non-recurring Gains/Losses) (%) | 4.02 | 4.15 | -0.13 | Non-recurring Gains and Losses Items (Jan-Jun 2025) | Non-recurring Gains and Losses Item | Amount (RMB) | | :--- | :--- | | Gains/Losses from Disposal of Non-current Assets | -2,727,673.58 | | Government Subsidies Included in Current Profit/Loss | 38,025,791.26 | | Reversal of Impairment Provisions for Receivables Subject to Separate Impairment Testing | 53,953,772.88 | | Other Non-operating Income and Expenses Apart from the Above | 352,207.20 | | Less: Income Tax Impact | 12,812,616.20 | | Minority Interest Impact (After Tax) | 264,509.13 | | Total | 76,526,972.43 | Share Capital Changes and Shareholder Information Statement of Share Capital Changes During the reporting period, there were no changes in the company's total share capital or shareholding structure, and no share changes after the reporting period until the announcement date impacted financial indicators like EPS or net assets per share - During the reporting period, there were no changes in the company's total share capital or shareholding structure[11] - No share changes occurred from the end of the reporting period to the announcement date that impacted financial indicators such as earnings per share or net assets per share[12] Changes in Restricted Shares During the reporting period, there were no changes in the company's restricted shares - Changes in restricted shares: Not applicable[13] Shareholder Numbers and Shareholding As of the end of the reporting period, the company had 52,554 common shareholders, including 61 H-share shareholders; among the top ten shareholders, Tianjin Municipal Investment Co., Ltd. held the highest stake at 45.57%, with some shares pledged, and Hong Kong Securities Clearing (Nominees) Limited was the second-largest shareholder, holding 21.52% - As of the end of the reporting period, the total number of common shareholders was 52,554, including 61 H-share shareholders[13][14] Top Ten Shareholders' Shareholding (as of June 30, 2025) | Shareholder Name | Number of Shares Held at Period-End (shares) | Percentage (%) | Share Status | Quantity (shares) | Shareholder Nature | | :--- | :--- | :--- | :--- | :--- | :--- | | Tianjin Municipal Investment Co., Ltd. | 715,565,186 | 45.57 | Pledged | 285,000,000 | State-owned Legal Person | | Hong Kong Securities Clearing (Nominees) Limited | 337,888,710 | 21.52 | None | - | Other | | Hong Kong Securities Clearing Company Limited | 13,915,164 | 0.89 | None | - | Other | | Central Huijin Asset Management Co., Ltd. | 13,868,294 | 0.88 | None | - | State-owned Legal Person | | China Construction Bank Corporation - Oriental Red CSI Oriental Red Dividend Low Volatility Index Securities Investment Fund | 7,318,800 | 0.47 | None | - | Other | | Zhejiang Jinxin Construction Engineering Co., Ltd. | 6,920,000 | 0.44 | None | - | Domestic Non-state-owned Legal Person | | Wang Caijin | 6,860,738 | 0.44 | None | - | Domestic Natural Person | | Jinan Hanxiang Investment Management Partnership (Limited Partnership) | 6,412,789 | 0.41 | None | - | Other | | China Merchants Bank Co., Ltd. - Southern CSI 1000 ETF Securities Investment Fund | 5,688,700 | 0.36 | None | - | Other | | Yan Gang | 5,032,150 | 0.32 | None | - | Overseas Natural Person | - Ningbo Bestless Trading Co., Ltd. and its concerted parties collectively held 156,956,000 H-shares of the company, accounting for 9.99% of the company's total share capital, with none of the shares pledged[19] Changes in Controlling Shareholder and Actual Controller During the reporting period, there were no changes in the company's controlling shareholder or actual controller - Changes in controlling shareholder and actual controller: Not applicable[19] Information on Directors, Supervisors, and Senior Management Changes in Shareholdings of Directors, Supervisors, and Senior Management During the reporting period, there were no changes in the shareholdings of the company's directors, supervisors, and senior management - Changes in shareholdings of directors, supervisors, and senior management: Not applicable[20] Equity Incentives Granted to Directors, Supervisors, and Senior Management During the Reporting Period During the reporting period, no equity incentives were granted to the company's directors, supervisors, or senior management - Equity incentives granted to directors, supervisors, and senior management during the reporting period: Not applicable[20] Board Report Explanation of the Company's Industry and Main Business During the Reporting Period In 2025, the water and environmental protection industry benefits from policies like urban renewal and beautiful river/lake initiatives, shifting towards quality improvement and new business areas; the company's core business includes municipal sewage, water supply, and reclaimed water, complemented by strategic new ventures in new energy heating/cooling, solar, and waste treatment, optimizing its business structure - As the final year of the '14th Five-Year Plan' in 2025, the Central Urban Work Conference proposed the goal of building modern people's cities, requiring the water and environmental protection industry to shift from incremental expansion to quality improvement of existing assets, and fostering new segmented business areas in the urban environmental protection market[20][21] - The Ministry of Ecology and Environment and the National Development and Reform Commission issued the 'Action Plan for Beautiful River and Lake Protection and Construction (2025-2027)', setting quantitative targets and bringing business opportunities in environmental monitoring, industrial park wastewater, rural domestic sewage, and agricultural non-point source pollution control[22] - The General Office of the CPC Central Committee and the General Office of the State Council issued the 'Opinions on Improving the Market-based Allocation System for Resource and Environmental Factors', aiming to promote the sound development of carbon emission rights, water use rights, and pollutant discharge rights trading systems, which is conducive to the development of asset-light professional emission reduction operation services[23] - The National Development and Reform Commission and other departments issued the 'Action Plan to Promote High-Quality Development of the Heat Pump Industry', emphasizing policy support for heat pump promotion, application, and renovation, facilitating the company's water source and ground source heat pump heating and cooling businesses[24] Company's Industry Overview In the final year of the '14th Five-Year Plan', policies such as the Central Urban Work Conference, Beautiful River and Lake Action Plan, and opinions on market-based allocation of resource and environmental factors were intensively introduced, guiding the water and environmental protection industry from incremental expansion to quality improvement of existing assets, and fostering new segmented business areas like environmental monitoring, industrial park wastewater, and rural domestic sewage treatment, with the heat pump industry development plan also bringing opportunities for new energy heating and cooling businesses - The Central Urban Work Conference proposed building modern people's cities that are innovative, livable, beautiful, resilient, civilized, and smart, requiring the water and environmental protection industry to shift from large-scale incremental expansion to quality improvement of existing assets, focusing on enhancing comprehensive capabilities in technology, operations, and management[21] - The 'Action Plan for Beautiful River and Lake Protection and Construction (2025-2027)' sets a target of achieving approximately 40% beautiful river and lake completion rate by 2027, covering six aspects: rectification of river discharge outlets, water pollution control in industrial parks, collection and treatment of domestic sewage, control of agricultural non-point source pollution, cleanliness of water bodies and shorelines, and safety of drinking water sources[22] - The 'Opinions on Improving the Market-based Allocation System for Resource and Environmental Factors' aims to promote the sound development of carbon emission rights, water use rights, and pollutant discharge rights trading systems, with the market expected to be more active by 2027, benefiting the development of professional emission reduction operation services[23] Company's Main Business Operations The company's main business comprises basic services and strategic new businesses; basic services include municipal sewage treatment, water supply, and reclaimed water, with a total capacity of 6.2371 million cubic meters/day, serving as the primary source of revenue and profit, while strategic new businesses include new energy heating/cooling (serving 6.96 million square meters), distributed photovoltaic power generation and energy storage (total designed installed capacity of 38 MWp/5.5 MWh), hazardous waste treatment (total disposal capacity of 181,300 tons/year), and sludge treatment (total capacity of 3,010 tons/day), aiming to optimize the overall business structure - The company's main business consists of basic services and strategic new businesses. Basic services are the primary source of revenue and profit, while strategic new businesses in terms of profitability, economic added value, and investment payback period complement basic services, optimizing the overall business structure[25] Basic Business Scale (as of the end of the reporting period) | Business Type | Scale | | :--- | :--- | | Total Water Business Scale | 6.2371 million cubic meters/day | | Equity Sewage Treatment Scale | 5.2701 million cubic meters/day | | Equity Water Supply Business Scale | 0.315 million cubic meters/day | | Equity Reclaimed Water Scale | 0.48 million cubic meters/day | | Entrusted Operation Sewage Treatment Scale | 0.172 million cubic meters/day | Strategic New Business Scale (as of the end of the reporting period) | Business Type | Scale | | :--- | :--- | | Total New Energy Heating/Cooling Service Area | 6.96 million square meters | | Total Designed Installed Capacity of Distributed Photovoltaic Power Generation | 38 MWp | | Designed Installed Capacity of User-side Energy Storage | 5.5 MWh | | Total Hazardous Waste Business Disposal Capacity | 181,300 tons/year | | Total Sludge Treatment Business Scale | 3,010 tons/day | Analysis of Core Competencies During the Reporting Period The company's core competencies lie in safe and efficient operations, practical and leading R&D, professional and innovative teams, and a reputation for integrity and stability, enhanced during the reporting period by optimizing operational control, deepening cost reduction and efficiency improvement, increasing R&D investment (obtaining 2 invention patents), promoting digital intelligence and AI+ technology applications, and strengthening talent development and brand building - The company's core competitive capabilities are reflected in its safe, stable, compliant, and efficient operational capabilities; practical, leading, systematic, and continuous R&D capabilities; professional, responsible, collaborative, and innovative employee team; and a reputation for integrity, accountability, standardization, and stability[27] - In terms of operational management, the company has established an integrated large-scale operational control system, deepened cost reduction and efficiency improvement management, and vigorously promoted smart water construction[28] - In terms of scientific research and development, the company continued to increase R&D investment, achieving breakthroughs in phosphorus removal agent application, deep treatment equipment development, and energy storage project promotion, obtaining 2 authorized invention patents, and promoting the deep application of IoT digital intelligence and AI+ technologies in various business areas[28] - In terms of brand building, the company was recognized as one of the 'Top Ten Influential Enterprises in China's Water Industry' for the twentieth consecutive year, won the First Prize of the Natural Science Award from the All-China Environmental Federation, and had multiple cases selected by the All-China Federation of Environmental Service Industry Chambers of Commerce[29] Discussion and Analysis of Operating Performance During the reporting period, the company achieved significant results in innovation-driven development, operational efficiency, deepening reforms, and capital management, focusing on 'three new' and 'three quantity' initiatives, with R&D investment of approximately RMB 20 million, the launch of the Baoying Xianhe project, expansion into the asset-light market, restructuring of a two-tier control and institutional system, and successful issuance of a RMB 500 million green medium-term note, enhancing market value - The company focused on its technology leadership positioning, restructured its technology management and achievement transformation system, invested approximately RMB 20 million in R&D during the reporting period, obtained 2 authorized invention patents, and won the First Prize of the Natural Science Award from the All-China Environmental Federation[30] - The company actively sought policy and resource support, explored and promoted existing asset revitalization projects such as plant-network integration and Xianyang Road Phase II, steadily advanced projects like Wuhu, Karamay, and Wendeng upgrade and renovation, launched the Baoying Xianhe project, and steadily expanded the asset-light market[30] - The company restructured its 'Group-Project' two-tier control and institutional system by adjusting its organizational structure, compressing management levels, clarifying control responsibilities, built 11 full-level module control systems, and successfully completed the first phase of its digital transformation with a focus on business-finance integration[31] - The company actively engaged with financial institutions, successfully completed the filing for a RMB 500 million green medium-term note issuance, has over RMB 4 billion in available bank credit lines, and enhanced its capital market image through market value management and investor relations management[31] Analysis of Main Business Operations The company's operating revenue decreased by 1.81% year-on-year, mainly due to the water inflow at Tianjin No. 4 Plant; operating costs, selling expenses, administrative expenses, and financial expenses all decreased, with financial expenses decreasing by 17.43% primarily due to loan interest rate replacement; net cash flow from operating activities increased by 17.96% year-on-year, but net cash flow from investing activities saw a significant outflow due to increased project construction payments and asset acquisition payments, and net cash flow from financing activities significantly decreased due to reduced borrowings Analysis of Changes in Financial Statement Items (Jan-Jun 2025 vs. Prior Year Period) | Item | Current Period Amount (RMB) | Prior Year Period Amount (RMB) | Change (%) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 2,177,915,496.72 | 2,218,165,636.41 | -1.81 | Tianjin No. 4 Plant's sewage treatment revenue decreased due to water inflow | | Operating Costs | 1,361,599,524.47 | 1,375,177,188.63 | -0.99 | Continuous optimization of operating costs | | Selling Expenses | 3,853,033.52 | 5,114,154.66 | -24.66 | Decrease in selling expenses for hazardous waste business | | Administrative Expenses | 91,448,154.98 | 94,702,270.65 | -3.44 | Continuous promotion of cost reduction and efficiency improvement | | Financial Expenses | 146,373,643.87 | 177,271,541.28 | -17.43 | Interest expenses decreased due to loan interest rate replacement | | R&D Expenses | 16,303,446.24 | 20,828,281.90 | -21.72 | Recognized based on research project progress | | Net Cash Flow from Operating Activities | 517,864,524.50 | 439,000,213.39 | 17.96 | Operating cash receipts higher than prior year period | | Net Cash Flow from Investing Activities | -664,062,442.29 | -420,007,736.25 | -58.11 | Payments for project construction and asset acquisition higher than prior year period | | Net Cash Flow from Financing Activities | -210,528,343.58 | 5,099,916.95 | -4,228.07 | Decrease in cash received from borrowings | | Taxes and Surcharges | 35,690,376.21 | 22,408,506.23 | 59.27 | Increase in property tax and land tax | | Investment Income | 829,978.35 | 0.00 | Not applicable | Disposal of equity in Hong Kong subsidiary | | Credit Impairment Losses | 25,286,554.13 | -1,218,065.09 | 2,175.96 | Recovery of some accounts receivable for which impairment was previously recognized | | Asset Disposal Income | -3,553,929.71 | -322.07 | -1,103,365.00 | Termination of Shandong Tanchuang Company's landfill project | | Non-operating Income | 286,355.32 | 4,858,010.19 | -94.11 | Last year's period recognized case execution funds, none this period | | Non-operating Expenses | 69,581.34 | 127,024.30 | -45.22 | Last year's period subsidiary paid overdue property tax | | Minority Interest Income/Loss | 17,982,216.75 | 38,749,741.81 | -53.59 | Net profit of non-wholly owned subsidiaries lower than prior year period | Analysis of Assets and Liabilities As of the end of the reporting period, the company's total assets increased by 1.17% compared to the end of the previous year; notes receivable and receivables financing significantly decreased due to endorsement transfers and maturities; investment properties and right-of-use assets grew notably due to property leasing and new building leases; short-term borrowings and contract liabilities increased due to new borrowings and increased prepayments, while employee compensation payable and taxes payable decreased due to payments of year-end accruals Analysis of Changes in Major Balance Sheet Items (June 30, 2025 vs. December 31, 2024) | Item Name | Current Period-End Amount (RMB) | Percentage of Total Assets (%) | Prior Year-End Amount (RMB) | Prior Year-End Percentage of Total Assets (%) | Change (%) | Explanation | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Notes Receivable | 20,705,527.71 | 0.08 | 34,433,958.06 | 0.14 | -39.87 | Subsidiary's bank acceptance bills endorsed and transferred | | Receivables Financing | 2,000,000.00 | 0.01 | 7,024,347.00 | 0.03 | -71.53 | Subsidiary's bank acceptance bills matured | | Investment Properties | 14,211,374.09 | 0.06 | 7,657,173.00 | 0.03 | 85.60 | Subsidiary's properties leased out | | Right-of-Use Assets | 8,796,274.63 | 0.03 | 3,722,393.42 | 0.01 | 136.31 | Subsidiary added new building leases | | Short-term Borrowings | 62,425,038.33 | 0.25 | 29,228,819.26 | 0.12 | 113.57 | Subsidiary added new short-term borrowings | | Contract Liabilities | 314,139,225.82 | 1.23 | 221,717,388.90 | 0.88 | 41.68 | Prepayments for road tolls, reclaimed water pipeline connection fees, EPC contract payments, etc. | | Employee Compensation Payable | 49,525,761.49 | 0.19 | 105,252,309.61 | 0.42 | -52.95 | Payment of part of performance bonuses accrued at year-end | | Taxes Payable | 54,665,202.58 | 0.21 | 111,152,981.14 | 0.44 | -50.82 | Payment of taxes accrued at year-end | | Lease Liabilities | 4,504,548.79 | 0.02 | 1,280,116.25 | 0.01 | 251.89 | Subsidiary added new building leases | Analysis of Investment Status During the reporting period, the company's main external equity investments were for capital injections into subsidiaries in the water business sector, such as a RMB 11.2 million investment in Baoying Chuangye Water Co., Ltd. for the Xianhe Sewage Treatment Plant upgrade and renovation project, while Shandong Tanchuang Environmental Technology Development Co., Ltd. terminated the Tancheng Integrated Material Ecological Disposal Center project - During the reporting period, the company's external equity investments were distributed in the water business sector, primarily for capital injections into subsidiaries[43] - The company invested RMB 11.2 million in Baoying Chuangye Water Co., Ltd. to implement the Xianhe Sewage Treatment Plant upgrade and renovation project, accounting for 70% of the project's capital[44] - Shandong Tanchuang Environmental Technology Development Co., Ltd. terminated the Tancheng Integrated Material Ecological Disposal Center project and completed the signing of the 'Land Reclamation Agreement'[44] Analysis of Major Holding and Participating Companies The company's major holding subsidiaries include Tianjin Zhongshui Co., Ltd. and Hangzhou Tianchuang Water Co., Ltd.; Tianjin Zhongshui primarily engages in reclaimed water production, sales, and facility construction, with operating revenue of RMB 101.891 million and net profit of RMB 29.7975 million during the reporting period, while Hangzhou Tianchuang Water mainly operates and maintains sewage treatment and reclaimed water utilization facilities, with operating revenue of RMB 129.3892 million and net profit of RMB 47.7081 million Financial Data of Major Holding and Participating Companies (as of the end of the reporting period) | Company Name | Company Type | Main Business | Registered Capital (RMB 10,000) | Total Assets (RMB 10,000) | Net Assets (RMB 10,000) | Operating Revenue (RMB 10,000) | Operating Profit (RMB 10,000) | Net Profit (RMB 10,000) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Tianjin Zhongshui Co., Ltd. | Subsidiary | Reclaimed water production, sales; development and construction of reclaimed water facilities, etc. | 10,000 | 175,429.01 | 48,360.25 | 10,189.1 | 3,877.06 | 2,979.75 | | Hangzhou Tianchuang Water Co., Ltd. | Subsidiary | Operation and maintenance of sewage treatment and reclaimed water utilization facilities and technical services, etc. | 37,744.5 | 74,884.63 | 70,359.21 | 12,938.92 | 5,658.9 | 4,770.81 | Other Disclosure Matters The company faces government credit risk, policy and market risk, operational management risk, and legal risk; to mitigate these, the company adopts measures such as proactive policy research, strengthening risk management, adhering to rule of law in enterprise governance, and improving management levels, including enhancing policy analysis, establishing sound risk prevention and control mechanisms, utilizing legal means to protect rights, standardizing management, and perfecting emergency plans - The company faces government credit risk, as sewage treatment service fees primarily originate from the government; any issues with government fiscal revenue or credit directly impact project companies' cash flow[47] - The company faces policy and market risks, including the impact of policy changes on business models (e.g., new concession mechanisms), regional industrial policy impacts on hazardous waste business, and slowing growth in the environmental protection industry with intensified market competition[47] - The company faces operational management risks due to increasingly stringent environmental governance standards, leading to renovation and operational risks for sewage treatment plants, and risks associated with adjusting original concession agreements[48] - The company faces legal risks, including default risks from government delays in service fee payments under concession contracts, and risks of illegal subcontracting/sub-subcontracting in construction contracts, or general contractors' tight cash flow leading to lawsuits from actual constructors demanding joint liability from the company[48] Potential Risks The company's main risks include government credit risk (reliance on government payments), policy and market risk (policy adjustments, intensified market competition), operational management risk (higher environmental standards, renovation and operational challenges), and legal risk (contract breaches, joint liability) - Government credit risk: Funds for sewage treatment service fees primarily come from the government, and government fiscal revenue and credit directly affect the cash flow of project companies[47] - Policy and market risk: Policy changes involve industrial structure adjustment, financial regulation, taxation, environmental protection, and other areas, significantly impacting the business models of public utilities and the water and environmental protection industry; intensified market competition will lead to changes in industry structure[47] - Operational management risk: The nation's increasing emphasis on environmental protection issues and increasingly stringent environmental governance standards impose higher requirements on environmental enterprises' management capabilities and operational quality, leading to renovation and operational risks for sewage treatment plants[48] - Legal risk: Concession-type contracts carry default risks due to government delays in service fee payments; construction engineering contracts carry risks of illegal subcontracting/sub-subcontracting, or general contractors' tight cash flow leading to lawsuits from actual constructors demanding joint liability from the company[48] Risk Control Measures The company manages risks through policy research, strengthening risk management, adhering to rule of law in enterprise governance, and improving management levels; specific measures include high-standard planning for the '15th Five-Year Plan', establishing sound risk prevention and control mechanisms, utilizing litigation management to increase collections, standardizing production and operation risk management, strengthening facility and equipment maintenance, improving quality monitoring, and developing emergency plans - Proactive policy research and strategic future planning: Closely monitor domestic and international economic situations, intensify research and analysis of industry policies, plan for the '15th Five-Year Plan' with high standards, and seek new developments in comprehensive water resource utilization and comprehensive energy utilization[49][50] - Strengthening risk management and adhering to rule of law in enterprise governance: Establish a comprehensive risk management organization, enhance policy risk assessment and early warning, improve risk prevention and control mechanisms, and utilize litigation management and other means to increase collections and protect legitimate corporate rights and interests[51] - Improving management levels and reducing operational risks: Timely control production and operational risks through standardized management, including personnel training, compiling compliance obligation checklists, strengthening facility and equipment maintenance, improving quality monitoring, and developing water environment rescue plans and safety production plans[51] Company Guarantee Status Company's External Guarantees During the reporting period, the company provided no guarantees to entities other than its subsidiaries; guarantees provided to subsidiaries totaled RMB 164.505 million, with a total outstanding guarantee balance of RMB 2.7925064 billion at period-end, accounting for 28.29% of the company's net assets, and debt guarantees provided to guaranteed parties with an asset-liability ratio exceeding 70% amounted to RMB 222.3688 million Company Guarantee Status (as of the end of the reporting period) | Guarantee Type | Amount (RMB 10,000) | | :--- | :--- | | Total Guarantees Issued During Reporting Period (Excluding Guarantees to Subsidiaries) | 0 | | Total Outstanding Guarantees at Period-End (A) (Excluding Guarantees to Subsidiaries) | 0 | | Total Guarantees Issued to Subsidiaries During Reporting Period | 16,450.50 | | Total Outstanding Guarantees to Subsidiaries at Period-End (B) | 279,250.64 | | Total Guarantees (A+B) | 279,250.64 | | Total Guarantees as Percentage of Company's Net Assets (%) | 28.29 | | Amount of Guarantees Provided to Shareholders, Actual Controllers, and Their Related Parties (C) | 0 | | Amount of Debt Guarantees Provided Directly or Indirectly to Guaranteed Parties with Asset-Liability Ratio Exceeding 70% (D) | 22,236.88 | | Amount of Total Guarantees Exceeding 50% of Net Assets (E) | 0 | | Total of the Above Three Guarantee Amounts (C+D+E) | 22,236.88 | Financial Accounting Report Condensed Consolidated Balance Sheet As of June 30, 2025, the company's total assets were RMB 25.448 billion, an increase of 1.17% from year-end 2024; total current assets were RMB 7.047 billion, and total non-current assets were RMB 18.401 billion; total liabilities were RMB 14.414 billion, with current liabilities at RMB 4.542 billion and non-current liabilities at RMB 9.872 billion; total equity attributable to listed company shareholders was RMB 9.870 billion Condensed Consolidated Balance Sheet (as of June 30, 2025) | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Assets | | | | Total Current Assets | 7,046,972,353.49 | 6,856,660,856.38 | | Total Non-current Assets | 18,401,240,248.06 | 18,298,320,839.33 | | Total Assets | 25,448,212,601.55 | 25,154,981,695.71 | | Liabilities | | | | Total Current Liabilities | 4,542,127,049.46 | 4,587,557,557.10 | | Total Non-current Liabilities | 9,871,615,008.80 | 9,770,129,592.35 | | Total Liabilities | 14,413,742,058.26 | 14,357,687,149.45 | | Shareholders' Equity | | | | Total Equity Attributable to Listed Company Shareholders | 9,869,881,582.87 | 9,668,867,730.10 | | Minority Interests | 1,164,588,960.42 | 1,128,426,816.16 | | Total Shareholders' Equity | 11,034,470,543.29 | 10,797,294,546.26 | | Total Liabilities and Shareholders' Equity | 25,448,212,601.55 | 25,154,981,695.71 | Condensed Consolidated Statement of Comprehensive Income In H1 2025, the company achieved operating revenue of RMB 2.178 billion and net profit of RMB 491 million, a year-on-year increase of 6.56%; net profit attributable to listed company shareholders was RMB 473 million, a year-on-year increase of 12.09%; basic earnings per share were RMB 0.30, and diluted earnings per share were RMB 0.30 Condensed Consolidated Statement of Comprehensive Income (H1 2025 vs. H1 2024) | Item | H1 2025 (RMB) | H1 2024 (RMB) | | :--- | :--- | :--- | | Operating Revenue | 2,177,915,496.72 | 2,218,165,636.41 | | Operating Profit | 585,373,735.98 | 565,452,730.09 | | Total Profit | 585,590,509.96 | 570,183,715.98 | | Income Tax Expense | 94,687,758.39 | 109,505,636.87 | | Net Profit | 490,902,751.57 | 460,678,079.11 | | Net Profit Attributable to Listed Company Shareholders | 472,920,534.82 | 421,928,337.30 | | Minority Interest Income/Loss | 17,982,216.75 | 38,749,741.81 | | Total Comprehensive Income | 490,902,751.57 | 460,678,079.11 | | Basic Earnings Per Share (RMB) | 0.30 | 0.27 | | Diluted Earnings Per Share (RMB) | 0.30 | 0.27 | Notes to Consolidated Financial Statements The financial statements are prepared in accordance with Chinese Enterprise Accounting Standards and are unaudited; revenue and segment information indicate that the company's income primarily derives from sewage treatment, reclaimed water treatment, heating/cooling, and tap water supply, with sewage treatment business segmented by region; no interim dividends were distributed during the reporting period; total accounts receivable amounted to RMB 4.418 billion, with 58.23% due within 1 year; total accounts payable were RMB 972 million, contract liabilities RMB 314 million, and other payables RMB 1.083 billion - These financial statements are prepared in accordance with the 'Enterprise Accounting Standards - Basic Standards' issued by the Ministry of Finance on February 15, 2006, and subsequent periods, various specific accounting standards, and relevant regulations; this interim financial report does not include all notes of a normal annual financial report[58] - Management determines operating segments based on reports regularly reviewed by the strategy committee for strategic decision-making, considering operations from the perspectives of services provided and the most significant operating regions[60] - The company's board of directors did not recommend any interim dividends for the six-month period ended June 30, 2025[68] Revenue and Segment Information The company's operating revenue primarily comes from sewage treatment and sewage treatment plant construction (Tianjin Plant, Hangzhou Plant, other regions), reclaimed water treatment and supporting projects, heating and cooling, and tap water supply; in H1 2025, Tianjin Plant's sewage treatment revenue was RMB 707 million, and other regions' sewage treatment revenue was RMB 644 million; all of the group's external transaction revenue and non-current assets originate from China Revenue and Other Income Analysis (H1 2025 vs. H1 2024) | Item | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Operating Revenue | 2,177,915,496.72 | 2,218,165,636.41 | | Other Income | 40,163,815.78 | 44,007,424.19 | | Total | 2,218,079,312.50 | 2,262,173,060.60 | External Transaction Revenue by Operating Segment (Six Months Ended June 30, 2025) | Segment | External Transaction Revenue (RMB) | | :--- | :--- | | Tianjin Plant (Sewage Treatment and Sewage Treatment Plant Construction) | 706,958,247.16 | | Hangzhou Plant (Sewage Treatment and Sewage Treatment Plant Construction) | 128,250,559.22 | | Other Regions (Sewage Treatment and Sewage Treatment Plant Construction) | 644,161,934.16 | | Reclaimed Water Treatment and Supporting Projects | 117,086,371.99 | | Heating and Cooling and Related Facility Construction Services | 114,299,849.10 | | Tap Water Supply and Tap Water Plant Construction | 40,974,404.91 | | Other Segments | 426,184,130.18 | | Consolidated Total | 2,177,915,496.72 | - The group's external transaction revenue and non-current assets are entirely sourced from China[63][64] - For the six months ended June 30, 2025, the group's operating revenue from a single customer classified under the sewage treatment segment was RMB 681,775,788.43, accounting for 31% of the group's total operating revenue (compared to 34% in the same period of 2024)[64] Operating Profit In H1 2025, the company's operating profit was RMB 585 million; major expenses included depreciation and amortization of RMB 375 million, employee costs of RMB 214 million, raw materials and consumables used of RMB 157 million, and repair and insurance expenses of RMB 70 million Major Expense Components of Operating Profit (H1 2025 vs. H1 2024) | Expense Item | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Depreciation and Amortization Expenses | 375,130,425.96 | 349,291,130.85 | | Employee Costs | 213,808,092.77 | 213,769,641.15 | | Raw Materials and Consumables Used | 156,654,639.80 | 103,954,572.17 | | Repair and Insurance Expenses | 70,287,032.28 | 70,641,293.26 | Income Tax Income tax expense for H1 2025 was RMB 94.6878 million, comprising current income tax of RMB 107.1635 million and deferred income tax of -RMB 12.4757 million; the company had no taxable profits in Hong Kong - As the group had no taxable profits in Hong Kong for the six months ended June 30, 2025, there was no Hong Kong income tax for the current period[66] Income Tax Components (H1 2025 vs. H1 2024) | Item | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Current Income Tax | 107,163,453.52 | 104,739,330.95 | | Deferred Income Tax | -12,475,695.13 | 4,766,305.92 | | Total | 94,687,758.39 | 109,505,636.87 | Accounts Receivable As of June 30, 2025, total accounts receivable amounted to RMB 4.418 billion, with a net amount of RMB 4.048 billion after deducting bad debt provisions of RMB 369 million; of this, accounts receivable due within 1 year accounted for 58.23%, and 1-2 years accounted for 28.69% Accounts Receivable Details (as of June 30, 2025 vs. December 31, 2024) | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Accounts Receivable | 4,417,694,508.41 | 3,984,679,509.64 | | Less: Bad Debt Provision | -369,450,065.44 | -394,853,174.49 | | Net Amount | 4,048,244,442.97 | 3,589,826,335.15 | Accounts Receivable Aging Analysis (as of June 30, 2025) | Aging | Amount (RMB) | Percentage (%) | | :--- | :--- | :--- | | Within 1 year | 2,572,325,655.94 | 58.23 | | 1-2 years | 1,267,590,293.76 | 28.69 | | 2-3 years | 196,550,021.89 | 4.45 | | 3-4 years | 240,326,244.67 | 5.44 | | 4-5 years | 91,319,976.56 | 2.07 | | Over 5 years | 49,582,315.59 | 1.12 | | Total | 4,417,694,508.41 | 100.00 | Accounts Payable, Contract Liabilities, Other Payables, and Income Tax and Other Taxes Payable As of June 30, 2025, total accounts payable amounted to RMB 972 million, with over 1 year accounting for 32.63%; total contract liabilities were RMB 314 million, mainly including prepayments for heating/cooling project ancillary fees, reclaimed water pipeline connection fees, and road tolls; total other payables were RMB 1.083 billion, primarily for engineering payments and quality retention fees Accounts Payable, Contract Liabilities, Other Payables, and Income Tax and Other Taxes Payable (as of June 30, 2025 vs. December 31, 2024) | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Accounts Payable | 971,897,012.09 | 946,965,173.51 | | Contract Liabilities | 314,139,225.82 | 221,717,388.90 | | Other Payables | 1,082,597,852.45 | 1,060,257,870.64 | | Income Tax and Other Taxes Payable | 54,665,202.58 | 111,152,981.14 | | Total | 2,423,299,292.94 | 2,340,093,414.19 | Accounts Payable Aging Analysis (as of June 30, 2025) | Aging | Amount (RMB) | Percentage (%) | | :--- | :--- | :--- | | Within 1 year (inclusive) | 654,742,041.91 | 67.37 | | Over 1 year | 317,154,970.18 | 32.63 | | Total | 971,897,012.09 | 100.00 | - As of June 30, 2025, accounts payable overdue by more than one year amounted to RMB 317,154,970.18, primarily consisting of RMB 97,722,207.03 in raw water fees payable by Qujing Chuangye Water Co., Ltd. and RMB 43,164,456.80 in engineering payments payable by Tianjin Zhongshui Co., Ltd., which remain unsettled due to incomplete project finalization[70] Contract Liabilities Details (as of June 30, 2025 vs. December 31, 2024) | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Prepayment for Heating/Cooling Project Ancillary Fees | 109,152,098.43 | 124,788,900.75 | | Prepayment for Reclaimed Water Pipeline Connection Fees | 125,468,825.09 | 77,082,139.96 | | Prepayment for Road Tolls | 46,120,000.00 | - | | Prepayment for Hazardous Waste Treatment | 14,466,873.11 | 11,460,666.51 | | Prepayment for EPC Contract | 11,414,027.34 | - | | Other | 7,517,401.85 | 8,385,681.68 | | Total | 314,139,225.82 | 221,717,388.90 | Other Payables Details (as of June 30, 2025 vs. December 31, 2024) | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Engineering Payments and Quality Retention Fees | 717,112,420.43 | 760,475,061.18 | | Payments for Acquisition of Fixed Assets and Intangible Assets | 44,859,294.77 | 116,882,401.92 | | East Suburb Project Old Plant Asset Transfer Collection | 66,887,408.80 | 66,987,858.80 | | Dividends Payable | 152,364,129.85 | 7,986,980.00 | | Other | 101,374,598.60 | 107,925,568.74 | | Total | 1,082,597,852.45 | 1,060,257,870.64 | - As of June 30, 2025, other payables overdue by more than one year primarily consist of engineering payments and quality retention fees for construction projects such as the Honghu City Sewage Treatment Project and Karamay City Sewage Treatment Project, which remain unsettled due to incomplete project finalization[72] Repurchase, Sale, or Redemption of the Company's Listed Securities Trading Status of the Company's Listed Securities During the reporting period, neither the company nor its subsidiaries repurchased, sold, or redeemed any of the company's listed securities - During the reporting period, neither the company nor its subsidiaries repurchased, sold, or redeemed any of the company's listed securities[73] Corporate Governance Code Compliance with Corporate Governance Code The Board is unaware of any reasonable indications that the company has not complied with the code provisions set out in Part 2 of Appendix C1 to the Listing Rules of the Stock Exchange of Hong Kong Limited during the reporting period or currently - The directors are unaware of any reasonable indications that the company has not complied with the code provisions set out in Part 2 of Appendix C1 to the Listing Rules of the Stock Exchange of Hong Kong Limited at any time during the reporting period or currently[74] Audit and Risk Control Committee Committee Responsibilities and Review The Audit and Risk Control Committee is responsible for reviewing and monitoring the company's financial reporting procedures, internal controls, and strategies for addressing significant risks; the committee members include Non-executive Director Mr. Wang Yongwei, Independent Non-executive Directors Mr. Xue Tao, Mr. Wang Shanggan, and Ms. Liu Fei; the committee has reviewed and agreed upon the financial accounting principles, standards, and methods adopted in the group's unaudited interim accounts for the six months ended June 30, 2025 - The Audit and Risk Control Committee is responsible for reviewing and monitoring the company's financial reporting procedures and internal controls, and has added responsibilities such as deliberating on significant risk response strategies and risk resolution plans[75] - The members of the Audit and Risk Control Committee consist of Non-executive Director Mr. Wang Yongwei, Independent Non-executive Directors Mr. Xue Tao, Mr. Wang Shanggan, and Ms. Liu Fei[75] - The Audit and Risk Control Committee and the company's management have reviewed the accounting principles and methods adopted by the group and discussed matters such as internal controls and financial reporting, including reviewing the unaudited interim results and interim report[75]