Jiangnan Water(SH:601199) Zheng Quan Zhi Xing·2025-08-27 22:56Core Viewpoint - Jiangnan Waterworks (601199) reported a decline in revenue and net profit for the first half of 2025 compared to the same period in 2024, indicating challenges in maintaining growth despite improvements in profitability metrics such as gross margin and net margin [1]. Financial Performance Summary - Total revenue for the first half of 2025 was 606 million yuan, a decrease of 5.32% year-on-year [1]. - Net profit attributable to shareholders was 164 million yuan, down 3.25% year-on-year [1]. - In Q2 2025, total revenue was 312 million yuan, reflecting a 9.51% decline year-on-year, while net profit was approximately 69.08 million yuan, a decrease of 19.34% [1]. - Gross margin improved to 39.73%, up 6.28% year-on-year, and net margin increased to 27.09%, up 2.19% year-on-year [1]. - Total expenses (selling, administrative, and financial) amounted to 72.81 million yuan, accounting for 12.01% of revenue, which is a 14.93% increase year-on-year [1]. - Earnings per share remained at 0.18 yuan, unchanged from the previous year, while operating cash flow per share dropped to 0.04 yuan, a decrease of 49.66% year-on-year [1]. Balance Sheet Highlights - Cash and cash equivalents increased by 3.43% to 671.7 million yuan [2]. - Accounts receivable rose significantly by 28.29% to 321 million yuan [1]. - Interest-bearing debt increased by 1.42% to 686 million yuan [1]. - Net assets per share increased by 17.19% to 4.76 yuan [1]. Cash Flow Analysis - Net cash flow from operating activities decreased by 49.66%, attributed to increased cash payments for goods and services and higher tax payments [3]. - Net cash flow from investing activities increased by 26.09%, influenced by previous recoveries of investment funds [3]. - Net cash flow from financing activities decreased by 28.52%, primarily due to reduced cash inflows from bank borrowings [4]. Business Evaluation - The company's return on invested capital (ROIC) was 7.4% last year, indicating a generally weak capital return performance over the past decade, with a median ROIC of 6.74% [5]. - The net profit margin was reported at 26.22%, suggesting a high value-added in products or services [5]. Debt Servicing Capability - The company maintains a healthy cash asset position, indicating strong debt servicing capabilities [6].