Chongqing Water(SH:601158) Zheng Quan Zhi Xing·2025-08-23 23:51Core Insights - Chongqing Water's total revenue for the first half of 2025 reached 3.519 billion yuan, a year-on-year increase of 7.16%, while net profit attributable to shareholders was 458 million yuan, up 10.06% year-on-year [1] - The company's accounts receivable increased significantly, with a year-on-year growth of 68.32% [1] - The gross profit margin improved to 31.26%, reflecting an increase of 8.47% year-on-year, while the net profit margin rose to 13.13%, up 2.47% year-on-year [1] Financial Performance - Total revenue for 2024 was 3.283 billion yuan, compared to 3.519 billion yuan in 2025, marking a 7.16% increase [1] - Net profit attributable to shareholders increased from 416 million yuan in 2024 to 458 million yuan in 2025, a growth of 10.06% [1] - The company's operating cash flow per share saw a significant increase of 109.43%, rising to 0.2 yuan per share [1] Key Financial Metrics - The company's gross profit margin improved to 31.26% in 2025 from 28.82% in 2024, an increase of 8.47% [1] - The net profit margin increased from 12.82% in 2024 to 13.13% in 2025, reflecting a 2.47% rise [1] - The total of selling, administrative, and financial expenses amounted to 561 million yuan, accounting for 15.95% of revenue, which is a 4.29% increase year-on-year [1] Cash Flow and Debt Analysis - The net cash flow from operating activities increased by 109.43%, attributed to higher payments received from the Chongqing Municipal Finance Bureau for sewage treatment [3] - The company experienced a 27.69% decrease in cash and cash equivalents, dropping to 1.756 billion yuan [1] - Interest-bearing liabilities rose by 10.26%, reaching 12.362 billion yuan [1] Business Model and Investment Considerations - The company's performance is primarily driven by capital expenditures, necessitating careful evaluation of the profitability of these investments [4] - Historical data indicates a median Return on Invested Capital (ROIC) of 8.95% over the past decade, with a notably low ROIC of 3.89% in 2024 [4] - The company has a debt-to-asset ratio of 34.38%, indicating a significant level of leverage [4]