Core Viewpoint - The company Junxin Environmental Co., Ltd. (军信股份) is seeking to go public on the Hong Kong Stock Exchange after three years of being listed on the Shenzhen Stock Exchange, focusing on waste incineration power generation and related services [1][3]. Company Overview - Junxin Environmental, headquartered in Changsha, Hunan, specializes in waste incineration power generation, sludge disposal, sewage treatment, landfill, and ash treatment [1][3]. - The company has a total market capitalization of 11.3 billion RMB as of August 18 [1]. - The company has distributed over 1.2 billion RMB in dividends over the past three years [3]. Financial Performance - The company's revenue has shown a growth trend, with reported revenues of approximately 1.55 billion RMB in 2022, 1.84 billion RMB in 2023, and 2.41 billion RMB in 2024 [10]. - Net profits for the same years were approximately 587 million RMB, 653 million RMB, and 686 million RMB, respectively [10]. - The gross profit margin has fluctuated, decreasing from 55.9% in 2022 to 41.5% in 2024, before rising to 53.9% in the first quarter of 2025 [11]. Business Segments - The company’s revenue sources include electricity sales, waste disposal fees, and service fees from various waste management projects [5]. - The proportion of electricity sales revenue decreased from 42.7% in 2022 to 29.4% in the first quarter of 2025, while waste disposal service revenue also declined from 51.9% to 32.9% during the same period [5][6]. Market Dynamics - The waste incineration power generation market in China is expected to grow, with an estimated compound annual growth rate (CAGR) of 7% from 2025 to 2029, reaching over 300 million tons by 2029 [11]. - The market for kitchen waste treatment and resource utilization is projected to grow at a CAGR of 20.1% from 2025 to 2029, reaching 63.9 billion RMB by 2029 [13]. Competitive Landscape - The company ranks fourth in national waste incineration capacity and third in kitchen waste treatment capacity, with the highest oil recovery rate in the country [14]. - The industry is characterized by low concentration, with the top ten companies holding only 30% of the market share [13][15]. Risks and Challenges - The company faces high customer concentration risk, with over 93% of revenue generated from five major clients, primarily local government agencies and power grid companies [9]. - The company has seen a rising trend in trade receivables, which may pose liquidity risks if clients fail to meet payment obligations [9][16]. - The company plans to expand internationally, with projects in Kyrgyzstan and Kazakhstan, but faces potential risks related to local policies and currency fluctuations [16].