Core Insights - Company reported 1H25 results in line with expectations, with revenue of HKD 14.3 billion, down 8% year-on-year, and net profit of HKD 2.2 billion, down 10% year-on-year [1] - The company declared an interim dividend of HKD 0.15 per share, up 7% year-on-year, with a payout ratio of 42%, an increase of 7 percentage points year-on-year [1] Environmental Energy - Construction revenue decreased to 9% of total revenue; operational efficiency improved, leading to a 12% increase in net profit [1] - New capacity added in 1H25 was 500 tons/day, totaling 139,000 tons/day; construction revenue fell 70% to HKD 0.5 billion, a decrease of 18 percentage points in segment share [1] - Operational metrics showed a 2% increase in waste processing volume, a 1.7 times increase in kitchen waste disposal, and a 3% increase in power generation per ton, with total operational revenue up 6% to HKD 5.1 billion [1] Water Services - Revenue growth driven by high water price projects, while profits were impacted by foreign exchange losses [2] - New sewage treatment capacity added was 700,000 cubic meters/day, totaling 6.92 million cubic meters/day; construction revenue decreased 17%, accounting for 46% of the segment [2] - Operational revenue increased 13% due to project upgrades and new projects, despite net profit declining 4% to HKD 0.4 billion due to rising foreign exchange losses [2] Green Environmental Services - Hazardous waste segment faced impairment due to insufficient capacity; however, net profit increased 30% driven by steam supply expansion [2] - No new biomass power generation or hazardous waste projects were launched in 1H25, with construction revenue dropping to HKD 0.05 billion [2] - Operational metrics showed a 4% decrease in biomass material processing and a 3% decrease in hazardous waste processing, but power generation efficiency improved with a 3% increase in grid electricity [2] Development Trends - Company expects stable capital expenditure from 2025 to 2026, with a potential increase in overseas investment proportion [2][3] Profit Forecast and Valuation - Profit forecasts remain unchanged, maintaining an "outperform" rating; despite a decline in earnings, the company demonstrated strong free cash flow and increased dividends [3] - The projected dividend per share for 2025 is raised to HKD 0.25, a 10% increase year-on-year, with the target price increased by 8% to HKD 5.2, indicating a 21.5% upside from the current stock price [3] - Current stock trades at 6.2x/6.0x P/E for 2025E/2026E, while the target price corresponds to 7.5x/7.2x P/E for the same periods [3]