Summary of the Conference Call for Everbright Environment Company Overview - **Company**: Everbright Environment - **Period**: First half of 2025 Key Points Financial Performance - Revenue decreased by approximately 1 billion HKD in the first half of 2025, primarily due to the appreciation of RMB against HKD and impairment of fixed assets in hazardous waste business, although core profitability remained stable and showed slight improvement [2][3] - Free cash flow was positive in the first half of 2025, benefiting from reduced capital expenditures, but national subsidy recovery was lower than the same period last year [2][4] - The company plans to maintain a stable dividend, with discussions ongoing among management, including the CEO and CFO, to formulate an actionable plan [2][5][6] National Subsidy Recovery - Progress was noted in national subsidies, with some previously unlisted projects now included in the social list, potentially converting to receivables within the year [2][8] - The Ministry of Finance is raising 200 billion RMB to address subsidy arrears, which could positively impact cash recovery [2][8] Capital Expenditure - Total capital expenditure for 2025 is expected to be controlled between 4 to 5 billion HKD, influenced by the progress of international projects, particularly in Uzbekistan [2][10] - The water and green environmental sectors are projected to have capital expenditures of approximately 1.5 billion HKD and 450 to 500 million HKD, respectively [11] Uzbekistan Projects - Two new projects in Uzbekistan commenced in April 2025, with a total investment of 2.16 billion RMB, benefiting from higher processing and electricity fees compared to domestic rates [12][13] - The projects operate under a 100% guaranteed model, ensuring payment even if actual processing volume is below capacity [12][13] Waste Treatment Sector - The hazardous waste sector underwent fixed asset impairment in the first half of 2025 to stabilize annual performance, with processing prices showing some recovery but not significantly improved [2][9] Operational Efficiency and New Revenue Streams - The company is expanding into kitchen waste treatment and heating services to diversify income sources, with a focus on developing the IDC business in collaboration with major operators [17][18] - The heating business aims to increase output from 6 million tons in 2024 to at least 7 million tons in 2025, as it has a higher profit margin than power generation [17][18] Reducing Dependence on National Subsidies - Measures to reduce reliance on national subsidies include adjusting processing fees and developing new business lines such as heating and kitchen waste treatment [21] - The company aims to eliminate dependence on national subsidies by 2030 through various operational improvements and revenue diversification strategies [21] Shareholder Engagement - The new chairman values shareholder feedback and incorporates it into decision-making processes, ensuring ongoing communication with investors [25] Additional Important Information - The company is currently working on eight power network construction projects with a total investment of approximately 1.4 billion RMB to enhance operational efficiency and support new business developments [20] - The company is actively pursuing ABN or ABS financing models, contingent on stable national subsidy recovery [15]