Investment Rating - The industry investment rating is maintained at "Outperform" [1] Core Views - The solid waste treatment sector shows a clear trend in dividends, with improving cash flow and profitability. The combination of "incineration + IDC" is expected to open a second growth curve. Water and wastewater treatment are seeing initial cost reduction and efficiency improvements, with attention on water price increases across various regions. The environmental equipment sector is showing signs of recovery in Q1 2025 [1][4][6] Summary by Sections Environmental Equipment - In Q1 2025, among 28 companies in the environmental equipment sector, 10 achieved year-on-year growth in net profit attributable to shareholders, while 3 turned losses into profits. In 2024, 8 companies saw a year-on-year increase in net profit, with 1 company turning profitable. The sales of sanitation vehicles reached 15,483 units, marking a 3.5% year-on-year increase, indicating a recovery trend [3][6] Solid Waste Treatment - The solid waste treatment sector reported a revenue of 1,493.72 billion yuan in 2024, a year-on-year increase of 36.09%. The net profit attributable to shareholders was 131.08 billion yuan, up 31.73%. In Q1 2025, the sector achieved a revenue of 353.81 billion yuan, a 30.99% year-on-year increase, with a net profit of 39.41 billion yuan, reflecting a 19.41% year-on-year growth [32][39][41] Water and Wastewater Treatment - In 2024, among 52 companies in the water and wastewater treatment sector, 17 achieved year-on-year growth in net profit, while 2 turned losses into profits. In Q1 2025, 23 companies reported year-on-year growth in net profit, with 4 turning profitable. The sector is experiencing initial improvements in cost reduction and efficiency [4][63]