Investment Rating - The investment rating for the company is "Buy" and is maintained [9] Core Views - The company reported a revenue of 6.7 billion yuan in the first half of 2025, a year-on-year decrease of 11.2%, while the net profit attributable to shareholders was 502 million yuan, an increase of 20.85% year-on-year [2][6] - The decline in revenue is primarily attributed to technical upgrades in hazardous waste resource utilization projects and challenges in the environmental engineering business [12] - The company expects to see improved profitability and cash flow in the second half of 2025, with potential resource utilization flexibility being released [6] Summary by Sections Financial Performance - In H1 2025, the company achieved a revenue of 6.7 billion yuan, down 11.2% year-on-year; net profit attributable to shareholders was 502 million yuan, up 20.85% year-on-year; and non-recurring net profit was 454 million yuan, up 10.24% year-on-year [2][6] - Q2 2025 saw revenue of 3.39 billion yuan, a decrease of 23.3% year-on-year, while net profit attributable to shareholders was 278 million yuan, an increase of 25.3% year-on-year [2][6] Business Segments - Revenue from hazardous waste resource utilization was 5.205 billion yuan, down 8.3% year-on-year, due to temporary production halts for technical upgrades [12] - Environmental operation revenue was 904 million yuan, up 2.3% year-on-year, while environmental engineering revenue was 592 million yuan, down 40.04% year-on-year due to selective order acceptance [12] Profitability and Cash Flow - The overall gross margin improved to 18.2%, up 3.93 percentage points year-on-year, with significant contributions from higher-margin projects [12] - Operating cash flow net amount improved significantly, reaching 347 million yuan in H1 2025, an increase of approximately 240 million yuan year-on-year [12] Future Outlook - The company anticipates that the profitability of resource utilization projects will improve, with a focus on the performance of metal prices such as bismuth, antimony, and tin [12] - Forecasted net profits for 2025-2027 are 791 million yuan, 911 million yuan, and 1.029 billion yuan, respectively, with corresponding PE ratios of 12.6x, 10.9x, and 9.7x [12]