Group 1 - The National Development and Reform Commission (NDRC) has issued a notice to enhance the regular application and recommendation process for infrastructure Real Estate Investment Trusts (REITs) [2] - The notice emphasizes the importance of expediting the application process for mature asset types such as toll roads, clean energy, warehousing and logistics, and affordable rental housing [2] - There is a focus on exploring new asset types for issuance, including railways, ports, ultra-high voltage transmission, communication towers, market-oriented rental housing, cultural tourism, specialized markets, and elderly care facilities [2][3] Group 2 - The notice encourages listed infrastructure REITs to raise funds through expansion to acquire quality assets, allowing applications for new acquisitions six months after the initial public offering [2] - It supports the acquisition of similar industry projects and related projects across different sectors, ensuring that new acquisitions align with ownership or operational revenue rights [3] - The notice aims to consolidate existing assets across regions to strengthen infrastructure REIT products and create a capital operation platform [3]

Core Viewpoint - The development of the infrastructure REITs market in China is gaining attention as a key tool for revitalizing existing assets and broadening social capital investment channels, with new guidelines issued by the National Development and Reform Commission to promote sustainable growth in this sector [1] Group 1: Expansion of Infrastructure REITs Market - The new guidelines encourage the issuance of large-scale infrastructure REITs projects, which can enhance market attractiveness and influence, serving as a strong driving force for market development [2] - Accelerating the application of mature asset types such as toll roads, clean energy, and affordable rental housing is crucial for stabilizing supply, boosting investor confidence, and optimizing market structure [3] - Increasing the issuance of potential asset types like heating, water conservancy, and data centers can activate new market dynamics, aligning with the growing demand in the digital economy [4] Group 2: Support for Fundraising - The guidelines optimize the fundraising mechanism for infrastructure REITs by streamlining the approval process and prioritizing eligible new projects, which is expected to reduce costs and improve efficiency [5][6] - Supporting cross-industry and cross-regional asset acquisitions helps diversify risks and create a more resilient revenue structure for infrastructure REITs [7] Group 3: Enhancing Service Levels - Establishing a specialized coordination service mechanism for private investment projects aims to facilitate their participation in the REITs market, thereby lowering participation costs and enhancing application convenience [8] - Implementing an information system for infrastructure REITs projects will standardize and improve the efficiency of the application and review processes, fostering a more transparent and effective management system [9]

Core Viewpoint - The National Development and Reform Commission (NDRC) has issued a notification to enhance the regular application and recommendation process for infrastructure Real Estate Investment Trusts (REITs), aiming to promote high-quality development in this sector [3][4]. Group 1: Market Expansion and Project Quality - Continuous efforts will be made to expand the market for infrastructure REITs, focusing on the regular application of mature asset types and prioritizing high-quality projects that align with national strategies and policies [4][5]. - The notification encourages the submission of large-scale projects that significantly contribute to the expansion of the infrastructure REITs market, including mature asset types like toll roads, clean energy, and logistics [4][5]. Group 2: Support for New Asset Types and Private Investment - The NDRC will actively explore new asset types for REITs, such as railways, ports, and cultural tourism, and will work to resolve existing challenges to facilitate their issuance [5][6]. - There is a strong emphasis on supporting private investment projects by establishing a specialized coordination service mechanism to assist in compliance and accelerate the listing process for eligible projects [2][6]. Group 3: Project Management and Funding - The notification outlines the need for a robust project management framework, ensuring that projects meet compliance and quality standards before being recommended for issuance [7][8]. - It encourages the use of existing REITs to acquire new projects through fundraising, simplifying the application process for new acquisitions and broadening the asset scope [6][8]. Group 4: Organizational Efficiency and Communication - The NDRC aims to improve operational efficiency by streamlining project submissions and enhancing the capabilities of provincial development and reform departments [9][10]. - An information system for infrastructure REITs will be launched to standardize and manage the project application process, ensuring transparency and traceability [10].

Core Viewpoint - The stock price of Shanghai Industrial Holdings (00363) has shown significant growth since its low in October 2022, reflecting the market's recognition of the company's long-term value despite recent short-term performance challenges [1][3]. Financial Performance - For the first half of 2025, Shanghai Industrial Holdings reported revenue of HKD 9.476 billion, a decrease of 8.6% year-on-year, and a net profit attributable to shareholders of HKD 1.042 billion, down 13.2% year-on-year [3][4]. - The decline in performance is primarily attributed to reduced sales from the real estate sector and significant impairment provisions totaling HKD 1.15 billion for inventory and investment properties [4][5]. Business Segments - The real estate sector's cyclical pressure has negatively impacted overall performance, with the company actively managing its asset structure by selling properties to recover cash [4][5]. - The infrastructure and environmental segment contributed HKD 9.33 billion in net profit, accounting for 92.2% of the company's total net profit, demonstrating its stability during downturns in other sectors [9][12]. - The consumer goods segment achieved a net profit of HKD 403 million, a year-on-year increase of 26%, driven by strong performance in tobacco and health products [9][12]. Financial Structure and Dividends - The company maintained a strong cash position of HKD 28.5 billion and reduced its interest-bearing debt to HKD 58.51 billion, improving its net debt ratio from 65.12% to 60.99% [7][12]. - The interim dividend per share remained at HKD 0.42, with a total payout of HKD 457 million, reflecting a commitment to shareholder returns despite short-term challenges [7][12]. Long-term Strategy - The company plans to focus on core urban renewal projects and enhance its asset management capabilities through the issuance of Real Estate Investment Trusts (REITs) [4][11]. - Shanghai Industrial Holdings aims to leverage opportunities in the environmental sector, particularly in wastewater and solid waste treatment, aligning with national policies on ecological protection [11][12]. - The management emphasizes a value investment approach, seeking quality investment targets in infrastructure, environmental, and consumer sectors to ensure long-term asset appreciation and shareholder returns [11][12].

Core Viewpoint - The company's 1H25 performance met expectations, with a slight revenue increase but a significant decline in net profit due to last year's one-time tax benefits from a REIT issuance [1] Financial Performance - 1H25 revenue reached HKD 6.67 billion, a year-on-year increase of 0.9% [1] - Net profit attributable to shareholders was HKD 490 million, down 24.9% year-on-year, aligning with expectations [1] - Revenue from toll roads and environmental protection stabilized, while logistics and port businesses faced challenges [1] Business Segments - **Toll Roads and Environmental Protection**: - Toll road revenue was HKD 2.64 billion, roughly flat year-on-year, with a 4% increase after excluding one-off impacts [1] - Environmental protection revenue rose 2% to HKD 810 million, achieving a net profit of HKD 95.32 million [1] - **Logistics Park and Services**: - Logistics park revenue increased 5% to HKD 790 million, but net profit attributable to shareholders fell 90% to HKD 55.91 million due to high base effects from last year's REIT issuance [1] - Logistics services revenue surged 47% to HKD 200 million, with a loss of HKD 47.98 million attributed to structural adjustments and rising operational costs [1] - **Ports**: - Port revenue decreased 13% to HKD 1.39 billion, with net profit down 72% to HKD 12.04 million due to market demand slowdown and increased depreciation costs from new projects [1] Future Outlook - The logistics park's transformation is expected to contribute positively to performance, with projected tax-adjusted gains of HKD 2.367 billion from the first phase of the South China logistics park [2] - The company aims to enhance asset value through public REIT expansions and private fund issuances [2] - The dividend policy remains stable, with an average payout ratio of 51% over the past five years, leading to an attractive dividend yield of 9.7% for 2025/2026 [2] Earnings Forecast and Valuation - The earnings forecast for 2025 and 2026 remains unchanged, with the current stock price reflecting a price-to-earnings ratio of 5.1 times for both years [2] - The target price is set at HKD 9.38, indicating a potential upside of 23.8% from the current stock price [2]

Core Viewpoint - Shanghai Industrial Holdings (00363.HK) reported a decline in revenue and profit for the first half of 2025, primarily due to reduced sales in the real estate sector and significant provisions for inventory impairment and fair value losses on investment properties [1] Group 1: Financial Performance - The company achieved a revenue of HKD 9.476 billion, a decrease of 8.6% year-on-year [1] - Profit attributable to shareholders was HKD 1.042 billion, down 13.2% compared to the previous year [1] - The board declared an interim dividend of HKD 0.42 per share, with a payout ratio of 43.8% [1] Group 2: Business Segments - The infrastructure and environmental protection business saw a profit decline of 11.6% to HKD 933 million, accounting for approximately 92.2% of the company's net profit [1] - The real estate segment reported a loss attributable to shareholders of HKD 492 million, mainly due to reduced gross profit from property sales [2] - The health sector recorded a profit of HKD 141 million, an increase of 118.4%, representing about 14.0% of the company's net profit [2] - The consumer goods segment, specifically Nanyang Tobacco, achieved revenue of HKD 1.273 billion, a year-on-year increase of 16.4%, with a net profit of HKD 337 million, up 20.0% [2] Group 3: Strategic Initiatives - The company is focusing on reform and innovation, accelerating the upgrade and transformation of its main businesses, and optimizing asset and business layout [1] - The company is responding to national policy directions by concentrating on water treatment and resource utilization, aiming to expand market share in the water and environmental industry [1] - The chairman emphasized the commitment to innovation-driven development and enhancing risk management to improve profitability [3]

Group 1 - The company reported a revenue of HKD 9.476 billion for the six months ending June 30, 2025, representing a year-on-year decrease of 8.61% [1] - The profit attributable to shareholders was HKD 1.042 billion, down 13.25% compared to the previous year [1] - Earnings per share were HKD 0.958, with an interim dividend proposed at HKD 0.42 per share [1] Group 2 - The decline in revenue and profit was primarily due to reduced sales from the real estate business and significant provisions for inventory impairment and fair value decreases in investment properties [1] - The company is actively responding to challenges posed by a complex external environment by seizing national policy opportunities and optimizing its industrial layout [1] - The toll road business continues to provide stable cash flow for the company [1] Group 3 - Looking ahead to the second half of 2025, the company acknowledges the uncertain economic outlook due to ongoing international geopolitical tensions and rising trade unilateralism [2] - The company plans to adhere to a prudent management philosophy and an innovation-driven development strategy, focusing on transforming and upgrading its main businesses [2] - The company aims to enhance its comprehensive risk management system and improve profitability while optimizing its asset structure to strengthen core competitiveness and deliver sustainable value to shareholders [2]

Group 1 - The company reported a revenue of HKD 9.476 billion for the six months ending June 30, 2025, representing a year-on-year decrease of 8.61% [1] - The profit attributable to shareholders was HKD 1.042 billion, down 13.25% compared to the previous year [1] - Earnings per share were HKD 0.958, with an interim dividend proposed at HKD 0.42 per share [1] Group 2 - The decline in revenue and profit was primarily due to reduced sales from the real estate business and significant provisions for inventory impairment and fair value decreases of investment properties [1] - The company is actively responding to challenges by seizing national policy opportunities and optimizing its industrial layout to enhance operational efficiency [1] - The toll road business continues to provide stable cash flow for the company [1] Group 3 - Looking ahead to the second half of 2025, the company acknowledges the uncertain economic outlook due to international geopolitical tensions and rising trade unilateralism [2] - The company plans to adhere to a prudent management philosophy and an innovation-driven development strategy, focusing on transforming and upgrading its main businesses [2] - There will be an emphasis on strengthening the comprehensive risk management system to enhance profitability and optimizing asset structure to improve core competitiveness [2]

Core Viewpoint - CICC maintains the profit forecast for Shenzhen International (00152) for 2025 and 2026, with a target price of HKD 9.38, indicating a potential upside of 23.8% from the current stock price [1] Group 1: Financial Performance - The company's 1H25 performance met expectations, with revenue of HKD 6.67 billion, a year-on-year increase of 0.9%, and a net profit of HKD 490 million, down 24.9% year-on-year, primarily due to a one-time tax benefit from the previous year [2] - Revenue from the toll road and environmental protection business remained stable, with toll road revenue at HKD 2.64 billion, essentially flat year-on-year, while the environmental protection business saw a 2% increase to HKD 810 million, achieving a net profit of HKD 95.32 million [3] Group 2: Business Segments - The logistics and port business faced challenges, with logistics park revenue up 5% to HKD 790 million, but net profit down 90% to HKD 55.91 million due to high base effects from the previous year [3] - Port revenue decreased by 13% to HKD 1.39 billion, with net profit down 72% to HKD 1.204 million, attributed to slowing market demand and increased competition [3] Group 3: Future Outlook - The logistics park's closed-loop model is expected to continue contributing to performance, with projected tax-adjusted gains of HKD 2.367 billion from the first phase of the South China logistics park [4] - The company aims to enhance cash flow through public REIT expansions and private fund issuances, leveraging asset appreciation [4] Group 4: Dividend Policy - The company has a stable dividend policy, with an average payout ratio of 51% over the past five years, leading to an attractive dividend yield of 9.7% for 2025/2026 based on profit forecasts [5]

Core Viewpoint - CICC maintains the profit forecast for Shenzhen International (00152) for 2025 and 2026, with a target price of HKD 9.38, indicating a potential upside of 23.8% from the current stock price [1] Financial Performance - The company reported 1H25 revenue of HKD 6.67 billion, a year-on-year increase of 0.9%, and a net profit attributable to shareholders of HKD 490 million, down 24.9%, aligning with CICC's expectations [2] - The decline in net profit is primarily due to a one-time tax benefit of approximately HKD 587 million recognized in the same period last year [2] Business Segment Analysis - **Toll Roads and Environmental Protection**: - 1H25 toll road revenue was HKD 2.64 billion, roughly flat year-on-year, but up 4% after excluding one-off impacts, driven by revenue growth from Jiangjiang Expressway and Jihe Expressway [3] - Environmental protection revenue increased by 2% to HKD 810 million, achieving a net profit of HKD 95.32 million [3] - **Logistics and Port Operations**: - Logistics park revenue rose by 5% to HKD 790 million, but net profit attributable to shareholders fell by 90% to HKD 55.91 million due to high base effects from last year's public REIT issuance [3] - Logistics services revenue surged by 47% to HKD 200 million, with a loss of HKD 47.98 million attributed to structural adjustments and rising operational costs [3] - Port revenue decreased by 13% to HKD 1.39 billion, with net profit down 72% to HKD 1.204 million, impacted by slowing market demand and increased depreciation costs from the Jingjiang Port project [3] - Logistics park transformation generated revenue of HKD 68.74 million, with a profit of HKD 200 million, benefiting from property sales in the Qianhai residential project [3] Future Outlook - The logistics park's large closed-loop model is expected to continue contributing to performance, with anticipated tax-adjusted gains of HKD 2.367 billion from the first phase of the South China logistics park [4] - The transformation of the South China logistics park is projected to gradually release land appreciation and development gains over the next 6-8 years [4] - The company plans to continue promoting public REIT expansions and private fund issuances to achieve cash flow and value appreciation [4] Dividend Policy - The company maintains a stable dividend policy, with an average payout ratio of 51% over the past five years, leading to an attractive dividend yield of 9.7% for 2025/2026 based on a 50% payout assumption [5]