Chongqing Water(SH:601158)2021-08-13 16:00Financial Performance - The company's operating revenue for the first half of 2021 was CNY 3,178,455,104.60, representing a 22.49% increase compared to the same period last year[15]. - Net profit attributable to shareholders of the listed company reached CNY 1,054,547,816.95, a 35.66% increase year-on-year[16]. - The net profit after deducting non-recurring gains and losses was CNY 773,546,132.90, reflecting a 7.98% increase compared to the previous year[16]. - Basic earnings per share increased by 37.50% to CNY 0.22 compared to the same period last year[17]. - Diluted earnings per share also rose by 37.50% to CNY 0.22 year-on-year[17]. - Revenue growth was primarily driven by increased water supply and adjustments in sewage treatment pricing[18]. - The weighted average return on equity increased by 1.70 percentage points to 6.72% compared to the previous year[17]. - Revenue from tap water supply was 80,727.14 million RMB, reflecting a year-on-year increase of 16.43%, with a gross margin of 29.36%, up by 4.66 percentage points[24]. - Revenue from sewage treatment was 183,556.66 million RMB, showing a year-on-year growth of 25.21%, with a gross margin of 48.86%, an increase of 1.86 percentage points[24]. Assets and Liabilities - Total assets increased by 11.50% to CNY 27,354,733,749.81 compared to the end of the previous year[16]. - The net assets attributable to shareholders of the listed company slightly decreased by 0.09% to CNY 15,509,179,695.20[16]. - The company's debt-to-asset ratio was 43.05%, up 6.60 percentage points from the end of the previous year, mainly due to the issuance of CNY 1 billion bonds and new bank loans of CNY 881 million[33]. - Total liabilities reached CNY 11,776,132,108.72, a rise from CNY 8,943,330,129.40, reflecting a growth of approximately 31.5%[115]. - Current liabilities amounted to CNY 5,501,333,298.14, compared to CNY 4,158,881,253.61, marking an increase of around 32.3%[115]. Cash Flow - The net cash flow from operating activities was CNY 833,391,769.05, showing a decrease of 14.54% from the previous year[16]. - Cash and cash equivalents increased by 15.49% to CNY 3,243,239,166.01 from CNY 2,808,188,993.10[36]. - The total cash inflow from operating activities was ¥3,651,449,170.42, compared to ¥3,453,464,079.64 in the same period of 2020, representing an increase of 5.7%[127]. - The net cash flow from operating activities for the first half of 2021 was ¥1,049,668,603.44, a decrease of 20.1% compared to ¥1,313,776,636.34 in the same period of 2020[129]. Operational Capacity - The company operates 29 water treatment plants with a production capacity of 2.7375 million cubic meters per day and 108 wastewater treatment plants with a daily processing capacity of 4.2408 million cubic meters[31]. - Water supply capacity increased by 29.30 thousand m³/day, reaching a total of 273.75 thousand m³/day, while sewage treatment capacity rose by 67.13 thousand m³/day to 424.08 thousand m³/day[23]. - The company has been granted water supply and sewage treatment concessions in Chongqing with a duration of 30 years[22]. Market Position - The company holds approximately 56% of the tap water market and 83% of the sewage treatment market in Chongqing, with a combined market share of about 88% for tap water and 93% for sewage treatment in the main urban area[23]. - The company plans to expand its market share in Chongqing and actively explore external markets for water supply, sludge disposal, and water environment governance[23]. Strategic Initiatives - The company is focusing on sustainable development and environmental protection as part of its strategic initiatives[22]. - The integration of new technologies such as IoT, big data, and cloud computing is driving the development of smart water services in the industry[23]. - The company aims to enhance operational management levels and ensure compliance with wastewater discharge standards amid increasing environmental regulations[23]. Risks and Challenges - The company faces risks related to the supply of raw materials, particularly due to uneven rainfall and extreme weather conditions affecting water purification costs[45]. - The company is at risk of not being able to adjust water prices in a timely manner, which could impact profitability amid rising supply costs[45]. - The company is exposed to tax risks due to changes in tax policies, which may increase its tax burden if it fails to meet the conditions for VAT refunds[46]. - The company is at risk of increased operational costs due to stricter environmental protection laws and regulations, which may lead to higher compliance costs[46]. Corporate Governance - The company has undergone changes in its board of directors and management, with several new appointments and elections taking place in 2021[50]. - The company reported no profit distribution or capital reserve fund increase plan for the half-year period[53]. - There are no significant lawsuits or arbitration matters reported during the reporting period[74]. Subsidiaries and Joint Ventures - The company has established several new subsidiaries, including a joint venture for environmental management with a capital contribution of CNY 49 million[39]. - The company has a total of 31 wholly-owned and controlling subsidiaries[147]. - The company has a total of 8 joint ventures, including Chongqing Dongyu Water Supply Co., Ltd.[147]. Environmental Compliance - The company maintains a 100% compliance rate for the water quality of its 14 centralized drinking water sources as reported by the Chongqing Ecological Environment Monitoring Center in 2021[30]. - The company has established a three-tier water quality monitoring system to ensure compliance with water quality standards[60]. - The company is committed to environmental responsibility and has developed emergency response plans for environmental incidents[59].