XREC(SZ:000598) Xin Lang Cai Jing·2025-09-04 04:37Core Viewpoint - The company positions itself as a national water and environmental service provider, focusing on expanding its business both within and outside Sichuan province, with significant growth expected in revenue and profit from 2025 to 2027 due to increased water treatment capacity and pricing adjustments [1][2]. Group 1: Financial Performance - In H1 2025, the company achieved revenue of 4.192 billion yuan, a year-on-year increase of 4.59%, and a net profit attributable to shareholders of 975 million yuan, up 5.03% year-on-year [2]. - The revenue for Q2 2025 was 2.169 billion yuan, reflecting a year-on-year increase of 0.31% and a quarter-on-quarter increase of 7.19% [2]. - The growth in revenue and profit is attributed to increased business volume in wastewater treatment and water sales, as well as adjustments in wastewater treatment service fees [2]. Group 2: Business Segmentation - In H1 2025, revenue from water supply increased by 3.79% to 1.268 billion yuan, with sales volume rising by 4.48% due to higher regional demand [3]. - Wastewater treatment revenue grew by 9.82% to 1.871 billion yuan, with treatment volume increasing by 2.06%, primarily driven by increased demand in Chengdu [3]. - Revenue from waste incineration power generation decreased by 2.60% to 367 million yuan, with the gross margin declining by 2.34 percentage points [3]. Group 3: Future Projections - The company has adjusted its revenue and gross margin forecasts for water supply and waste incineration, projecting EPS of 0.71, 0.78, and 0.84 yuan for 2025 to 2027, reflecting downward adjustments of 4%, 4%, and 5% respectively [4]. - The target PE for 2025 is set at 10.2 times, with a target price of 7.24 yuan, down from a previous estimate of 7.55 yuan [4].