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 Insights - The company reported a revenue of 780 million yuan for H1 2025, a year-over-year decrease of 9.64%, while net profit reached 107 million yuan, showing a growth of 25.51% when excluding non-recurring items [1] - The company achieved a significant increase in cash flow, with a cash collection ratio of 107.31% and a net cash ratio of 1.05, indicating improved cash flow conditions [1] - The company is actively expanding its product offerings in the biopesticide sector and has maintained a leading position in the domestic market for gibberellins [2] Financial Performance - H1 2025 gross margin was 25.96%, an increase of 2.57 percentage points year-over-year, while the net profit margin rose by 5.29 percentage points to 12.90% [1] - The company's asset-liability ratio stood at 47.98%, down 5.19 percentage points year-over-year, and interest-bearing debt ratio was 28.46%, a decrease of 2.64 percentage points [1] - The company processed 103 million tons of wastewater, a decrease of 4.17% year-over-year, while drinking water production increased by 7.72% to 30 million tons [2] Project Developments - The company has completed the construction and acceptance of the wastewater treatment project in Haining Qianshan Chemical Park, with plans for trial production in the second half of the year [3] - New projects, including the construction of a new wastewater treatment plant and an industrial wastewater pretreatment plant, are expected to begin trial operations in the second half of the year [3] - The company is also planning to start trial production for its biopesticide raw material and formulation relocation project in the upcoming months [3] Investment Outlook - The company is projected to achieve net profits of 211 million yuan, 188 million yuan, and 198 million yuan for the years 2025 to 2027, with current price-to-earnings ratios of 24.13x, 27.04x, and 25.75x respectively [3]