Zheng Quan Zhi Xing·2025-08-23 22:58Core Viewpoint - Dongjiang Environmental Protection (002672) reported disappointing financial results for the first half of 2025, with a decline in revenue and net profit compared to the previous year, indicating increased short-term debt pressure and weak operational performance [1][3]. Financial Performance Summary - Total revenue for the first half of 2025 was 1.5 billion yuan, a decrease of 3.4% year-on-year [1]. - The net profit attributable to shareholders was -278 million yuan, down 8.09% year-on-year [1]. - In Q2 2025, total revenue was 805 million yuan, an increase of 5.41% year-on-year, while net profit was -132 million yuan, a decline of 29.91% year-on-year [1]. - The gross profit margin was 3.24%, a decrease of 35.33% year-on-year, and the net profit margin was -21.88%, down 6.42% year-on-year [1]. - Total operating expenses (selling, administrative, and financial expenses) amounted to 307 million yuan, accounting for 20.43% of revenue, a slight decrease of 0.65% year-on-year [1]. Cash Flow and Debt Analysis - The net cash flow from operating activities decreased by 2229.55%, attributed to increased inventory in precious metals and industrial waste resource utilization [3]. - The net cash flow from investing activities increased by 49.97%, due to reduced investment payments for project construction [3]. - The net cash flow from financing activities increased by 181.59%, driven by an increase in interest-bearing debt [3]. - The liquidity ratio was 0.96, indicating rising short-term debt pressure [1][4]. Historical Performance and Investment Returns - The company's historical median Return on Invested Capital (ROIC) over the past decade was 6.16%, with a notably poor ROIC of -7.02% in 2023 [3]. - The company has reported losses in three out of twelve annual reports since its listing, suggesting a fragile business model [3]. Financial Health Indicators - The cash flow situation is concerning, with cash and cash equivalents to current liabilities at only 35.82% and the average operating cash flow over the past three years to current liabilities at 4.2% [4]. - The interest-bearing debt ratio reached 52.08%, and the total interest-bearing debt to average operating cash flow over the past three years was 42.02% [4]. - Financial expenses accounted for 135.94% of the average operating cash flow over the past three years, indicating high financial costs [4].