Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of RMB 27.94 [1]. Core Insights - The company reported a 66% year-on-year increase in new equipment orders, indicating strong demand in the equipment manufacturing sector [6]. - The new materials segment has achieved profitability, with significant revenue contributions from its subsidiaries [7]. - The company's environmental operations and equipment manufacturing are expected to support steady growth in performance [4]. Financial Performance - For Q3, the company achieved revenue of RMB 1.976 billion, a year-on-year increase of 2.28% and a quarter-on-quarter increase of 4.35% [4]. - The net profit attributable to the parent company for Q3 was RMB 710 million, reflecting a year-on-year increase of 3.23% [4]. - The company expects a compound annual growth rate (CAGR) of 8.54% in net profit from 2025 to 2027, with projected net profits of RMB 28.91 billion, RMB 31.55 billion, and RMB 34.58 billion for those years respectively [8]. Business Segments - Environmental Operations: The company processed a total of 10.5526 million tons of waste in the first three quarters, a year-on-year increase of 7.5% [5]. - Equipment Manufacturing: The total new equipment orders amounted to approximately RMB 4.47 billion in the first three quarters, marking a 66% increase year-on-year [6]. - New Materials: The subsidiary companies have started generating profits, with projected contributions from new material projects expected to increase in 2026 [7]. Valuation Metrics - The company’s projected earnings per share (EPS) for 2024, 2025, 2026, and 2027 are RMB 1.59, RMB 1.70, RMB 1.85, and RMB 2.03 respectively [3]. - The price-to-earnings (PE) ratio is expected to decrease from 13.86 in 2025 to 10.83 in 2027, indicating potential undervaluation [3]. - The target price of RMB 27.94 is based on a PE of 15.1 for 2026, reflecting the company's growth potential in solid waste revenue and new materials [8].

Core Viewpoint - The company experienced a decline in revenue in the first half of 2025, but net profit showed slight growth, indicating mixed performance across different business segments [1][2]. Financial Performance - In the first half of 2025, the company achieved operating revenue of 3.904 billion yuan, a year-on-year decrease of 5.1%, while net profit attributable to shareholders was 1.425 billion yuan, a slight increase of 0.13% [1]. - For Q2 2025, the company reported operating revenue of 1.894 billion yuan, down 10.04% year-on-year, and net profit of 709 million yuan, a decrease of 0.24% [1]. Business Segments - The environmental protection business continued to grow, with waste incineration project waste input reaching 6.8932 million tons, a year-on-year increase of 8.71%, and electricity generation of 1.863 billion kWh, up 7.65%, contributing to environmental operation revenue of 1.711 billion yuan, a growth of 6.2% [2]. - The equipment manufacturing and service business saw new orders of 3.559 billion yuan, a significant increase compared to 1.213 billion yuan in H1 2024, but revenue declined by 12.5% to 2.175 billion yuan due to the impact of revenue recognition timing [2]. Profitability and Margins - The company's overall gross margin for H1 2025 was 49.0%, an increase of 3.3 percentage points year-on-year, with project operation business gross margin rising to 62.7% and equipment manufacturing and service gross margin increasing to 38.1% [2]. - The increase in equipment gross margin is attributed to the company's active research and development of new products and an expanded product line [2]. Cash Flow and Investments - Cash flow improved significantly, with the cash collection ratio rising by 8.4 percentage points to 79.8%, indicating a positive trend in cash flow management [3]. - The company has initiated trial production of the 20,000-ton oxygen-enriched side-blown production line under the Jiaman project, producing 2,306 tons of nickel-containing products in H1 2025 [3]. - The company is also expanding its investment in lithium battery materials, planning to invest 80 million yuan for a 10% stake in a 60,000-ton lithium carbonate project in Quanzhou, Fujian [3]. Future Outlook - As of June 2025, the company operated 55 waste incineration projects with a capacity of approximately 37,300 tons per day, with ongoing projects expected to enhance future performance [4]. - The company anticipates net profits of 2.96 billion yuan, 3.47 billion yuan, and 3.97 billion yuan for 2025-2027, with corresponding price-to-earnings ratios of 11.2x, 9.6x, and 8.3x, maintaining a "buy" rating [4].

Core Insights - The company reported a quarter-on-quarter increase in net profit for Q2 2025, with revenue of 6.28 billion yuan (down 3.5% year-on-year, down 11.0% quarter-on-quarter) and a net profit of 700 million yuan (down 9.2% year-on-year, up 1.9% quarter-on-quarter) [1] - The decline in net profit year-on-year was primarily due to falling titanium dioxide prices, while the quarter-on-quarter increase was attributed to optimization in sponge titanium and new energy materials businesses [1] Group 1: Titanium Dioxide Business - In the first half of 2025, the company's titanium dioxide revenue was 8.66 billion yuan (down 8% year-on-year), accounting for 65.0% of total revenue; production was 682,200 tons (up 5% year-on-year), and sales were 612,000 tons (up 2% year-on-year), with international sales accounting for 56.3% [1] - The industry faced increased supply pressure due to ongoing domestic capacity releases and anti-dumping policies in regions like the EU, leading to intensified domestic competition and continued price declines [1] - The average price of titanium dioxide in Q2 2025 was 14,308 yuan/ton (down 12% year-on-year, down 1% quarter-on-quarter) [1] Group 2: Titanium and Iron Ore Business - The company's titanium concentrate production in the first half of 2025 was 691,900 tons (down 34% year-on-year), all for self-use; iron ore sales were 1.582 million tons (up 2% year-on-year) [2] - The average price of titanium concentrate in Q2 2025 was 1,831 yuan/ton (down 17% year-on-year, down 11% quarter-on-quarter) [2] - The company is advancing projects for combined development of the Hongge North Mine and the Xujia Iron Mine, with future titanium concentrate capacity expected to reach 2.48 million tons and iron concentrate capacity to reach 7.6 million tons [2] Group 3: Sponge Titanium and New Energy Materials - The company's sponge titanium revenue in the first half of 2025 was 1.49 billion yuan (up 13% year-on-year), accounting for 11.2% of total revenue; production was 36,200 tons (up 9% year-on-year), and sales were 38,700 tons (up 26% year-on-year) [3] - The market for sponge titanium showed a warming trend, with an average price increase of approximately 10.64% in the first half of 2025; the average price in Q2 2025 was 50,962 yuan/ton (down 3% year-on-year, up 9% quarter-on-quarter) [3] - Revenue from new energy materials was 530 million yuan (up 27% year-on-year), accounting for 4.0% of total revenue, with a gross margin of 12.4% (up 15 percentage points year-on-year) [3] - The company produced 45,800 tons of iron phosphate (up 64% year-on-year) and sold 38,500 tons (up 91% year-on-year) [3]