Group 1: Business Development Strategy - The company focuses on water and environmental protection, emphasizing "internal growth and external expansion" to enhance integrated supply and drainage services [2] - Plans to extend operations in Chengdu and surrounding areas while exploring markets outside the province [2] - Aims to diversify and extend the industrial chain, targeting emerging markets in water reuse and waste management [2][3] Group 2: Current Operations and Projects - As of now, the company operates and is constructing water supply projects with a total scale of approximately 4.3 million tons/day (with 400,000 tons/day under construction) [3] - Wastewater treatment projects exceed 4.8 million tons/day (with 300,000 tons/day under construction) [3] - The scale of waste incineration power generation projects is 12,000 tons/day (with 5,100 tons/day under construction) [3] Group 3: Financial Management and Accounts Receivable - The company has seen an increase in accounts receivable due to market expansion and growing business scale [3] - Actively pursuing collection of accounts receivable in line with local repayment policies [3] Group 4: Pricing and Dividend Considerations - Water supply pricing is subject to national policies and must go through a series of approval processes before adjustments [4] - Wastewater treatment service fees are adjusted based on agreements with government entities, typically reviewed annually [4] - The company is exploring a sustainable profit distribution mechanism to enhance dividend levels once capital expenditures decrease post-project completion [4]

Core Viewpoint - The company reported stable financial performance in Q2 2025, with revenue and net profit showing slight growth, and initiated a mid-year dividend, reflecting a commitment to shareholder returns [1][3]. Financial Performance - Q2 2025 revenue reached 3.16 billion yuan, up 1.7% year-on-year, while net profit attributable to shareholders was 550 million yuan, up 8% year-on-year, aligning with previous forecasts [1]. - For the first half of 2025, total revenue was 5.76 billion yuan, down 1.1% year-on-year, and net profit was 970 million yuan, up 9% year-on-year [1]. - The company declared its first interim dividend of 0.25 yuan per share, with a payout ratio of 21% [1]. Business Segments Solid Waste Management - Net profit from solid waste management increased by 24.5%, primarily due to the consolidation of Yuefeng Environmental [1]. - Solid waste revenue for the first half of 2025 was 2.95 billion yuan, down 3% year-on-year, with Yuefeng Environmental contributing 360 million yuan [1]. - The company’s operational capacity for waste incineration reached 66,000 tons per day, with an 18% year-on-year increase in waste disposal volume and a 21% increase in power generation [1]. Energy and Water Services - Energy segment revenue increased by 0.7% year-on-year, driven by a slight rise in natural gas sales [2]. - Water supply revenue grew by 2.2% year-on-year, while sewage treatment volume increased by 2.9% [2]. - Operating cash flow rose by 30% year-on-year, reaching 1.2 billion yuan, with over 1.15 billion yuan in receivables collected during the period [2]. Future Outlook - The company aims to enhance shareholder returns, projecting a minimum 10% year-on-year increase in dividends per share from 2024 to 2026 [3]. - For 2024, the projected dividend per share is expected to increase by 67%, with a payout ratio of 40% [3]. Profit Forecast and Valuation - Following the consolidation of Yuefeng Environmental, the company raised its net profit estimates for 2025 and 2026 by 16.6% and 20.3%, respectively, to 2.11 billion yuan and 2.34 billion yuan [4]. - The estimated dividend per share for 2025 and 2026 has been increased to 1 yuan and 1.1 yuan, respectively, with a target price raised by 20% to 31 yuan, indicating a potential upside of 19.8% from the current stock price [4].

Core Viewpoint - The company reported a strong performance in its mid-2025 report, with significant growth in revenue and net profit, particularly in its environmental protection business, indicating a robust operational capacity and strategic expansion in various sectors [1][2][3]. Group 1: Financial Performance - The company's main business revenue reached 3.22 billion yuan, a year-on-year increase of 11.25% [1] - Environmental protection business revenue was 2.454 billion yuan, up 14.58% year-on-year, accounting for 76.31% of total revenue [1] - Net profit attributable to shareholders was 589 million yuan, reflecting a 20.15% increase year-on-year [1] - Net cash flow from operating activities was 977 million yuan, a significant rise of 53.91% [1] Group 2: Operational Highlights - The amount of waste received for incineration was 6.0557 million tons, a 5.63% increase year-on-year, with a capacity utilization rate of 113.91% [1] - Power generation reached 178.798 million kWh, marking a 7.7% increase year-on-year [1] - The company has accelerated its heating market development, completing renovations on four projects and achieving a heating volume of 718,500 tons [1] Group 3: Strategic Developments - The company has successfully integrated new business models in environmental sanitation, winning five new projects and expanding its contract value through acquisitions [2] - The deployment of unmanned sanitation equipment has increased in key areas, improving vehicle utilization rates by nearly 30% [2] - The establishment of a recycling system has progressed, with 64 stores set up across 22 counties, and the operation of sorting centers [2] Group 4: Future Outlook - The company manages a total of 255.36 kilometers of highways, providing stable cash flow despite a 4.7% decrease in daily traffic volume [3] - Profit forecasts for 2025-2027 indicate a steady growth in net profit, with expected figures of 1.46 billion yuan, 1.63 billion yuan, and 1.82 billion yuan respectively [3] - The company maintains a "buy" rating based on the stability of its waste incineration business and the solid performance of its highway operations [3]