HONGCHENG WATERWORKS(SH:600461)2024-04-10 16:00Financial Performance - Net profit attributable to the parent company in 2023 was RMB 1,082,874,185.39, an increase of 12.59% compared to the previous year[26] - Total operating revenue for 2023 was RMB 8,048,268,332.00, a 3.43% increase year-over-year[26] - The company's net profit in 2023 was RMB 1,239,572,182.30[3] - The company's net profit from the parent company in 2023 was RMB 524,948,390.68[3] - Revenue for Q4 2023 reached RMB 2.34 billion, showing a significant increase compared to previous quarters[30] - Net profit attributable to shareholders in Q4 2023 was RMB 195.01 million, a decrease from the previous quarters[30] - Operating cash flow for Q3 2023 was RMB 596.47 million, the highest among all quarters[30] - Revenue for 2023 reached 8.048 billion yuan, a year-on-year increase of 3.43%[58] - Net profit attributable to the parent company was 1.083 billion yuan, up 12.59% year-on-year[58] - Revenue for the reporting period reached 8,048,268,332 yuan, an increase of 26,680,970 yuan, or 3.43% year-on-year, primarily driven by wastewater treatment services and gas sales[68] - Operating cash flow decreased by 21.20% to 1,728,828,540.45 yuan compared to the previous year[66] Dividends and Profit Distribution - The company plans to distribute a cash dividend of RMB 4.79 per 10 shares, totaling RMB 541,676,524.43[15] - The company's total distributable profit for 2023 was RMB 566,656,882.07[15] - The company's total share capital is 1,130,848,694 shares[15] - The company extracted 10% statutory reserve fund from the parent company's net profit, amounting to RMB 52,494,839.07[15] - The company's remaining undistributed profit carried forward to the next year is RMB 24,980,357.64[15] - The company did not propose a cash profit distribution plan despite having positive distributable profits[167] Business Operations and Market Share - The company's water supply business serves a population of 4 million with 11 water plants and 8,000 km of pipelines[37] - The company operates 108 sewage treatment plants with a market share exceeding 80% in Jiangxi Province[38] - The gas energy business serves 1.33 million natural gas users with a pipeline network of 7,414 km and a gasification rate of 82.3%[38] - The company's water supply business holds an absolute leading position in the Nanchang urban market with over 80 years of operational experience[87] - The company's sewage treatment business occupies more than 80% of the market share in county-level domestic sewage treatment in Jiangxi Province[87] - The company's market share in the garbage disposal business in Nanchang has reached 60%[87] - The company's market share in the natural gas sector in Nanchang exceeds 90%[87] - The company has established a strong regional competitive advantage, rooted in Nanchang, deeply cultivated in Jiangxi, and radiating nationwide[87] - The company's core businesses operate under a franchise model with a duration of 25 to 30 years, ensuring exclusivity, continuity, and stability[87] Revenue Breakdown by Business Segment - Water supply and related engineering revenue in 2023 was RMB 4.77 billion, a year-on-year increase of 3.41%[41] - Gas sales and installation engineering revenue in 2023 was RMB 2.34 billion, a year-on-year increase of 1.10%[41] - Solid waste treatment revenue in 2023 was RMB 767.16 million, a year-on-year increase of 4.18%[41] - Water supply sales volume was 39.57 million cubic meters, a slight increase of 0.37%[58] - Sewage treatment volume reached 116.123 million cubic meters, up 0.91% year-on-year[58] - Natural gas sales volume was 52.462 million cubic meters, an increase of 2.30%[58] - Waste incineration volume decreased by 1.31% to 948,300 tons[58] - Waste incineration power generation decreased by 6.30% to 439.1491 million kWh[58] - Heat supply increased significantly by 32.29% to 1.0567 million tons[58] - Water supply business achieved a daily capacity of 1.94 million cubic meters, with 270.86 kilometers of new pipelines and 39.54 kilometers of renovated pipelines[59] - Wastewater treatment design capacity reached 3.6985 million cubic meters per day, with a total investment of over 3.7 billion yuan in "plant-network integration" projects[59] - Gas sales volume reached 525 million cubic meters, a year-on-year increase of 2.30%, with 35 kilometers of old pipelines renovated[59] - Solid waste treatment revenue reached 767.163 million yuan, accounting for 9.53% of total operating revenue[59] - Revenue from water sales decreased by 1.45% year-on-year to 534,411,894.80 yuan, accounting for 9.69% of total costs[93] - Revenue from sewage treatment increased by 4.00% year-on-year to 1,401,775,395.73 yuan, accounting for 25.41% of total costs[93] - Revenue from gas sales increased slightly by 0.22% year-on-year to 1,805,920,398.10 yuan, accounting for 32.74% of total costs[93] - Revenue from water supply and drainage engineering increased significantly by 27.70% year-on-year to 510,369,224.23 yuan, accounting for 9.25% of total costs[93] - Revenue from waste water environmental engineering decreased by 11.95% year-on-year to 662,416,472.92 yuan, accounting for 12.01% of total costs[93] - Revenue from solid waste treatment increased by 8.85% year-on-year to 449,730,505.98 yuan, accounting for 8.15% of total costs[93] Acquisitions and Investments - The company acquired 100% equity of Nanchang Water Group Nanchang Industrial and Trade Co., Ltd. for RMB 46,717,100[28] - The company completed the acquisition of 100% equity of Nanchang Industrial Trade and 50% equity of Shuanggang Water Supply, achieving full control[59] - Long-term equity investments rose by 47.87% to 106,582,273.23 yuan, driven by the disposal of 51% equity in Nanchang Hangfan Environmental Protection Co., Ltd.[119] - Other non-current assets surged by 287.91% to 1,315,860,612.92 yuan, reflecting significant investment activities[79] - Other non-current assets surged by 287.91% to 1,315,860,612.92 yuan, mainly due to an increase in PPP project contract assets[119] Research and Development - R&D expenses increased by 4.42% to 126,765,890.01 yuan, mainly due to higher depreciation and amortization costs[73] - R&D investment totaled 126,765,890.01 yuan, accounting for 1.58% of total revenue[98] Financial Position and Liabilities - Total assets at the end of 2023 were 22.906 billion yuan, a 9.21% increase from the previous year[58] - Total equity was 8.965 billion yuan, up 10.18% year-on-year[58] - Short-term borrowings increased by 87.00% to 2,084,995,514.94 yuan, indicating higher liquidity needs[79] - Short-term borrowings increased by 87.00% to 2,084,995,514.94 yuan, primarily due to an increase in credit loans[119] - Non-current liabilities due within one year increased by 47.94% to 865,485,499.64 yuan, primarily due to an increase in long-term borrowings due within one year[119] - Provisions increased by 69.76% to 111,098,800.93 yuan, mainly due to increased expenses for major repairs and replacements in franchise projects[119] Environmental and Sustainability Initiatives - The company reduced carbon dioxide emissions by 83,200 tons through the use of energy-saving equipment in production[178] - The company plans to complete the construction of photovoltaic power stations with a total installed capacity of 100 MW to promote green and low-carbon development[84] - The company is constructing a photovoltaic power generation project on an 80-acre landfill site within the Maoyuan Circular Economy Industrial Park, with plans to expand similar projects in water and sewage treatment plants in Nanchang[129] - The company aims to enhance waste-to-energy efficiency through advanced technologies such as waste heat utilization and steam reheating, and is exploring opportunities in the solid waste treatment sector[129] - The company is leveraging the "supply-drainage integration" and "plant-network integration" models to advance urban sewage treatment and improve ecological water environments[129] - The company is focusing on the "14th Five-Year Plan" strategic goals, emphasizing ecological priority and green development, and aims to become a leading comprehensive environmental industry operator[130] Corporate Governance and Remuneration - Total remuneration for directors, supervisors, and senior management amounted to 7.6692 million yuan[151] - The company's independent directors received a remuneration of 0.67 million yuan each[151] - The company's vice presidents and board secretary received remuneration ranging from 43.37 to 48.27 million yuan[151] - The company's financial director received a remuneration of 48.02 million yuan[151] - The company's vice presidents received remuneration ranging from 43.41 to 47.87 million yuan[151] - The company's employee supervisor received a remuneration of 38.27 million yuan[151] - The company's remuneration decision-making process involves approval by the board of directors, board of supervisors, and shareholders' meeting[156] - The company's remuneration and assessment committee held its first meeting in 2023 to review the 2023 annual assessment of the management[156] - The company's remuneration policy is based on the principles of "efficiency, motivation, and fairness"[156] Employee Information - The company has a total of 6,026 employees, with 5,369 in the parent company and 657 in major subsidiaries[163] - The employee composition includes 3,330 production staff, 1,003 sales staff, 1,021 technical staff, 178 financial staff, and 494 administrative staff[163] - The educational background of employees includes 3 with a PhD, 100 with a master's degree, 1,487 with a bachelor's degree, 1,857 with an associate degree, 699 with a vocational degree, and 1,880 with education below vocational level[163] - The company has 1,567 retired employees for whom it bears expenses[163] Subsidiaries and Affiliates Performance - Nanchang Wanli Water Supply Co., Ltd. achieved a net profit of 101.192 million yuan in 2023, with total assets of 1,039.133 million yuan and net assets of 450.866 million yuan[103] - Nanchang Lvyuan Water Supply and Drainage Engineering Design Co., Ltd. achieved a net profit of 54.038 million yuan in 2023, with total assets of 182.045 million yuan and net assets of 129.808 million yuan[103] - Jiujiang Lantian Bishui Environmental Protection Co., Ltd. achieved a net profit of 119.328 million yuan in 2023, with total assets of 2,024.522 million yuan and net assets of 1,510.822 million yuan[103] - Pingxiang Hongcheng Water Industry Environmental Protection Co., Ltd. achieved a net profit of 56.245 million yuan in 2023, with total assets of 1,422.924 million yuan and net assets of 366.869 million yuan[104] - Wenzhou Hongcheng Water Industry Environmental Protection Co., Ltd. achieved a net profit of 89.117 million yuan in 2023, with total assets of 1,106.007 million yuan and net assets of 766.521 million yuan[104] - Wenzhou Qingbo Wastewater Treatment Co., Ltd. achieved a net profit of 0.793 million yuan in 2023, with total assets of 228.713 million yuan and net assets of -9.063 million yuan[104] - Nanchang Chaoyang Environmental Protection Co., Ltd. achieved a net profit of 24.276 million yuan in 2023, with total assets of 812.019 million yuan and net assets of 319.128 million yuan[104] - Jiangxi Hongcheng Water Industry Environmental Protection Co., Ltd. achieved a net profit of 5,875.542 million yuan in 2023, with total assets of 105,118.795 million yuan and net assets of 47,523.175 million yuan[104] - Jiangxi Hongcheng Environmental Construction Engineering Co., Ltd. achieved a net profit of 827.2 million yuan in 2023, with total assets of 30,985.079 million yuan and net assets of 5,982.018 million yuan[104] - Nanchang Gas Group Co., Ltd. achieved a net profit of 1,456.29 million yuan in 2023, with total assets of 25,312.417 million yuan and net assets of 11,485.276 million yuan[104] - Jiangxi Hongcheng Chengbei Sewage Treatment Co., Ltd. achieved a net profit of 18.49 million yuan in 2023, with total assets of 600.35 million yuan and net assets of 179.80 million yuan[107] - Jiangxi Hongcheng Chengdong Sewage Treatment Co., Ltd. achieved a net profit of 18.97 million yuan in 2023, with total assets of 932.78 million yuan and net assets of 212.90 million yuan[107] - Jiangxi Dingyuan Ecological Environmental Protection Co., Ltd. achieved a net profit of 194.05 million yuan in 2023, with total assets of 3.23 billion yuan and net assets of 1.16 billion yuan[107] - Jiangxi Lantian Bishui Environmental Engineering Co., Ltd. achieved a net profit of 4.62 million yuan in 2023, with total assets of 567.17 million yuan and net assets of 269.09 million yuan[107] - Anyi County Water Supply Co., Ltd. achieved a net profit of 3.59 million yuan in 2023, with total assets of 185.31 million yuan and net assets of 85.68 million yuan[107] - Nanchang Water Group Nanchang Industry and Trade Co., Ltd. achieved a net profit of 29.71 million yuan in 2023, with total assets of 103.46 million yuan and net assets of 74.94 million yuan[107] Future Plans and Strategic Goals - The company plans to build 100 high-quality pipeline direct drinking water projects by the end of the year, aiming for a daily supply of 400 tons[112] - The company aims to complete the construction of photovoltaic power stations with a total installed capacity of 100 MW to promote green and low-carbon development[112] - The company will actively expand several solid waste acquisition and merger projects to inject new momentum for sustainable development[112] - The company will promote capital operations targeting sewage treatment expansion projects[112] - The company is accelerating the construction of a smart drainage management platform, aiming to achieve integrated "plant-network" and "supply-drainage" management models[84] - The company is actively promoting the "5+X" industrial system, focusing on strengthening, supplementing, and extending the industrial chain[84] - The company is accelerating the transformation of old and new growth drivers, deepening the integration of the industrial chain ecosystem, and enhancing the environmental industry system[136] - The company is focusing on the "5+X" industrial system, leveraging strong cash flow to support business development and operational efficiency[136] Risks and Challenges - The company faces risks related to market uncertainty, policy and regulatory adjustments, delayed payment for sewage treatment services, supply chain disruptions, and potential influence from major shareholders[132] - The company is actively seeking new growth points in comprehensive services and energy businesses to mitigate risks associated with rising energy costs and supply chain disruptions[132] - The company is committed to improving corporate governance and protecting the interests of minority shareholders, with the controlling shareholder holding 32.31% of the company's shares[132] Environmental Compliance and Pollution Control - The company's key pollutant monitoring data is published in real-time on the "Jiangxi Environmental Quality Information Release Platform"[176] - The company has 86 subsidiaries and branches, including Nanchang Chaoyang Environmental Protection Co., Ltd., Jiangxi Hongcheng Water Industry Environmental Protection Co., Ltd. Nanchang County Branch, and others, all listed as key water environment pollutant discharge units in Jiangxi Province[199] - 4 companies in Wenzhou, Zhejiang Province, including Wenzhou Qingbo Wastewater Treatment Co., Ltd., are listed as key pollutant discharge units in Wenzhou[199] - The company's subsidiaries in Liaoning Province, including Yingkou Eastern Wastewater Treatment Plant and Western Wastewater Treatment Plant, are listed as key pollutant discharge units in Yingkou and Gaizhou[199] - Except for Xiajiang Chengnan and Quannan Jinlong, all other key pollutant discharge units have implemented the Grade A standard for wastewater discharge according to the "Urban Wastewater Treatment Plant Pollutant Discharge Standard (GB18918-2002)"[199] - Common pollutants controlled in wastewater discharge include Chemical Oxygen Demand (COD), Biochemical Oxygen Demand (BOD), Suspended Solids (SS), Total Nitrogen, Ammonia Nitrogen, and Total Phosphorus[199] Board and Committee Activities - The company's board of directors has undergone significant changes, with several members leaving due to term expiration and new members being elected[157] - The Audit Committee held 6 meetings in 2023, focusing on annual reports, internal audits, and financial statements[161] - The Strategic Development Committee held 1 meeting in 2023, discussing the establishment of an ESG Executive Committee[162] - The Compensation and Assessment Committee held 2 meetings in 2023, addressing stock incentive plans[161] Equity Incentives and Stock Plans - No significant updates on equity incentives were disclosed in the temporary announcements[169] - The company granted a total of 3,825,000 restricted shares to senior management