Chongqing Water(SH:601158)2022-08-19 16:00Financial Performance - The company's operating revenue for the first half of 2022 was approximately CNY 3.45 billion, an increase of 8.61% compared to the same period last year[17]. - The net profit attributable to shareholders of the listed company was approximately CNY 935.68 million, a decrease of 11.27% year-on-year[17]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was approximately CNY 845.86 million, an increase of 9.35% compared to the previous year[17]. - The net cash flow from operating activities was approximately CNY 985.04 million, up 18.20% from the same period last year[17]. - The total assets at the end of the reporting period were approximately CNY 28.83 billion, a decrease of 1.41% compared to the end of the previous year[17]. - The net assets attributable to shareholders of the listed company were approximately CNY 16.11 billion, down 1.99% from the previous year[17]. - Basic earnings per share for the first half of 2022 were CNY 0.19, a decrease of 13.64% year-on-year[18]. - The weighted average return on net assets was 5.68%, a decrease of 1.04 percentage points compared to the same period last year[18]. - The company achieved operating revenue of CNY 3.45 billion, an increase of 8.61% year-on-year[33]. - Net profit attributable to shareholders was CNY 936 million, a decrease of 11.27% year-on-year, primarily due to the absence of asset transfer impacts from the previous year[33]. Market Position and Operations - The company holds approximately 54% of the tap water market and about 83% of the sewage treatment market in Chongqing's main urban area as of the end of 2021[24]. - The company is positioned to benefit from the increasing emphasis on ecological civilization and environmental protection policies in the water industry[23]. - The company is expanding its market presence in urban and rural integrated water supply and wastewater resource utilization[23]. - The company plans to expand its market presence beyond Chongqing to provinces such as Sichuan, Yunnan, Hubei, and Henan, aiming to become a leading comprehensive water service provider in China[24]. - The company is focusing on the growth of the domestic recycled water operation market, which is expected to experience rapid development[24]. Revenue Streams - Water supply revenue reached 82,929.53 million RMB, a year-on-year increase of 2.73%, while sewage treatment revenue was 206,725.80 million RMB, up 12.62% year-on-year[24]. - The average water price for residential use is 2.5410 RMB/m³, while for non-residential use it is 3.2606 RMB/m³[26]. - The wastewater treatment service price in Chongqing is set at 2.98 CNY/m³, with adjustments made every three years by the Chongqing Municipal Finance Bureau[28]. Investments and Acquisitions - The company established a joint venture with Changjiang Environmental Group with a registered capital of ¥1 billion, holding a 60% stake[38]. - The company invested ¥89 million in its subsidiary Anning City Yuning Water Co., Ltd. during the reporting period[38]. - The company completed the asset transfer for the acquisition of water supply projects, with a total payment of 536 million yuan made as per the agreement[70]. - The company acquired assets from Chongqing Nancheng Water Co., Ltd. for CNY 85.0147 million, including a water plant with a designed capacity of 50,000 m³/day[77]. Environmental and Regulatory Compliance - The company is committed to complying with environmental laws and regulations, enhancing operational management, and improving emergency response capabilities to mitigate environmental risks[43]. - The company has established a comprehensive water quality monitoring system with over 300 detection capabilities, ensuring the safety and quality of water supply and sewage discharge[52]. - The company has not faced any administrative penalties due to environmental issues during the reporting period[55]. - The company is actively participating in projects related to the Yangtze River protection and integrated urban-rural water supply, aiming to expand its business scope and enhance capacity[43]. Financial Stability and Risks - The company maintained a debt-to-asset ratio of 43.83%, an increase of 0.26 percentage points from the end of the previous year[33]. - The company faces risks related to raw material supply, water price adjustments, and compliance with water quality standards, which may impact operational costs and profitability[42]. - The company is required to cover reasonable costs including taxes and fees in its wastewater treatment pricing[30]. - The company has implemented measures to strengthen risk control and management to avoid potential tax risks related to VAT policies[43]. Corporate Governance and Shareholding - The largest shareholder, Chongqing Derun Environment Co., Ltd., holds 50.04% of the shares, totaling 2,401,800,000 shares[81]. - Chongqing Water Environment Holdings Group Co., Ltd. is the second-largest shareholder with 38.52%, holding 1,849,160,689 shares[81]. - The company has committed to avoiding competition with its controlling shareholder, ensuring no direct or indirect engagement in competing businesses[60]. - The company has pledged to maintain an independent procurement, production, and sales system to protect its operational integrity[61]. Research and Development - The company’s R&D expenses were CNY 808,458, a decrease of 11.40% year-on-year[34]. - The company is focusing on digital transformation and technology innovation, including the development of "smart water services" using big data and cloud computing[32]. - The integration of new technologies such as IoT, big data, and cloud computing is driving the development of smart water services[24]. Accounting and Financial Reporting - The company adheres to the Chinese accounting standards, ensuring accurate financial reporting[136]. - The company’s financial statements are prepared based on the going concern principle, ensuring operational continuity for at least 12 months[134]. - The company does not have any changes in significant accounting policies or estimates during the reporting period[196].