Core Points - The article discusses the severe groundwater over-extraction issue in Hengshui City, Hebei Province, where agricultural water usage accounts for 77% of total water consumption [1] - A significant turnaround has been achieved in groundwater management, with the area of severely over-extracted deep groundwater in Hengshui being completely eliminated, and groundwater levels expected to rise by 6.3 meters by the second half of 2024 [1] Group 1: Groundwater Management - Hengshui has implemented strict management measures by designating areas as either no-extraction zones or limited-extraction zones to control groundwater usage [4] - The city has established a hierarchical management mechanism where local government officials are responsible for monitoring groundwater extraction [4][5] - The introduction of technology, such as card-operated water extraction systems, has led to more efficient water usage and cost management for farmers [4][10] Group 2: Surface Water Supplementation - Hengshui has initiated ecological water replenishment projects, including the introduction of 15 to 20 million cubic meters of water from the Yellow River to maintain water levels in Hengshui Lake [6] - Since 2014, a total of 820 million cubic meters of external water has been supplied to Hengshui Lake through various channels [6] - The city has improved its irrigation infrastructure, increasing the area irrigated by surface water to 4.45 million acres in 2023, with plans to expand to 5.145 million acres in 2024 [8] Group 3: Water Conservation Initiatives - The city has adopted advanced irrigation technologies, such as smart micro-drip irrigation systems, which have reduced water usage by 50% and lowered costs for farmers [10] - A comprehensive water-saving management system has been established, including the implementation of a contract water-saving management model [12] - By 2024, Hengshui aims to reduce water consumption per unit of GDP by 18.5% compared to 2020 levels, and water usage per unit of industrial added value by 45.9% [13]

Group 1: Company Overview - The company is a leading comprehensive water and environmental service provider in China, with a complete industry chain including investment, research and development, design, construction, and operation [2]. - Current operational and construction capacities include: - Water supply projects: approximately 4.3 million tons/day - Wastewater treatment projects: over 4.8 million tons/day - Reclaimed water utilization projects: approximately 1.3 million tons/day - Waste incineration power generation: 12,000 tons/day - Leachate treatment: 8,430 tons/day - Sludge disposal: 3,116 tons/day - Kitchen waste disposal: 1,950 tons/day [3]. Group 2: Pricing Mechanisms - Water pricing adjustments are submitted to government price authorities based on national policies and agreements, requiring cost audits and public hearings [5]. - Wastewater treatment service fees are adjusted every 2 to 3 years, with a current tentative average price of 2.63 RMB/ton for the 2024-2026 period in Chengdu [6]. Group 3: Project Developments - The Chengdu Wanxing Environmental Power Plant (Phase III) is under construction, with a waste processing capacity of 5,100 tons/day, sludge processing of 800 tons/day, and kitchen waste processing of 800 tons/day, expected to be operational by 2026 [7]. Group 4: Accounts Receivable Management - As of the end of 2024, accounts receivable amounted to approximately 4 billion RMB, with improvements in collection in some regions [8]. - The company emphasizes accounts receivable management and actively engages in collection efforts, integrating this into performance assessments. Group 5: Market Expansion Strategy - The company focuses on national expansion in the water and environmental service sector, particularly in the Chengdu market, while exploring resource integration and niche markets nationwide [8]. Group 6: Capital Expenditure and Dividends - Significant capital expenditures are expected due to multiple ongoing water supply and waste projects, with a gradual decrease anticipated as projects become operational in the next 1-2 years [8]. - The company is committed to increasing cash dividend ratios as major projects are completed and capacity is released [8].

Core Insights - Ordos City is characterized by severe water scarcity, with a per capita water resource of only 1,299 cubic meters, significantly lower than national and regional averages [1] - The city has implemented a "quality-based water supply, gradient treatment, and recycling" system to promote water conservation and efficient utilization [1] - As of December 2024, the groundwater level in Ordos has risen by 1.84 meters year-on-year, marking three consecutive years of increase [1] Water Resource Management - In November 2022, Ordos issued the "Four Waters and Four Determinations" plan to enforce water management principles [1] - The "Ordos City Water Resource Management Regulations" came into effect on January 1, 2024, providing legal support for standardized water resource management [1] - A water supply project utilizing the Yellow River's water indicators was launched on July 18, 2024, allowing for an annual intake of 28 million cubic meters [1] Industrial Water Conservation - The Zhongtian Hechuang Chemical Company has established a three-tiered water-saving management system, achieving significant water efficiency [2] - The company has a 3,000 cubic meters per hour deep processing facility for mine water, which replaces Yellow River water for production [2] - An investment of 150 million yuan in a high-salinity water salt production project reduces hazardous waste by 52,000 tons annually [2] Agricultural Water Efficiency - The Ordos region is promoting facility-based water-saving agriculture, with farmers exchanging irrigated land for greenhouses, significantly reducing water usage [6] - Each greenhouse can save over 1,500 cubic meters of irrigation water annually compared to traditional crops [6] - The implementation of small-flow drip irrigation technology has led to a 30% to 50% reduction in water usage while increasing crop yields by 15% [9] Urban Water Recycling - In the Kangbashi District, 80% of urban greening water comes from recycled water, with a daily processing capacity of 12,000 tons [11] - The district has laid 3,051.4 kilometers of recycled water pipelines, achieving an 83% irrigation rate for urban greening [12] - The annual savings from using recycled water for irrigation amount to 15.74 million cubic meters, reducing irrigation costs by 130 million yuan [12]