Group 1 - The core viewpoint of the news is that Yuanlesheng Asset Management has conducted research on a listed company, Jinko Environment, focusing on its strategic initiatives and financial performance [1] - Jinko Environment introduced its "three transformations" strategy, which includes resource utilization, digital intelligence, and productization, aimed at advancing the paradigm shift in the water treatment industry [1] - The company has developed an AI system called "Water Radish" that enables unattended operation of water plants, featuring functions such as operational management, online inspection, and intelligent work order systems [1] Group 2 - As of the end of 2024, Jinko Environment has an order backlog of 670.73 million yuan, representing a year-on-year decrease of 8.84% [1] - For the reporting period, the company's gross profit was 223.23 million yuan, showing a slight year-on-year increase of 0.12%, with a comprehensive gross margin of 36.17% [1] - The company has established channel partnerships with water service groups to enhance the sales efficiency of standardized equipment products [1] Group 3 - Jinko Environment has set a shareholder return plan for 2023-2025 and has already implemented profit distribution plans for 2023 and the first three quarters of 2024 [1]

Core Viewpoint - The company, Jinko Environment (688466), is focusing on a three-pronged strategy of resource optimization, digitalization, and productization to transform the water treatment industry towards industrialized production and intelligent operations, ultimately aiming for universal water accessibility. Group 1: Strategic Framework - The company's "resource optimization, digitalization, and productization" strategy forms an organic and interdependent system [2] - The "resource optimization strategy" aims to build a water recycling ecosystem, reducing reliance on conventional water sources and providing core application scenarios for digitalization and productization [2] - The "digitalization strategy" leverages data to reconstruct water treatment paradigms, converting manual experiences into algorithmic models, which serve as a technical foundation for enhancing resource efficiency and productization [2] - The "productization strategy" integrates the results of the first two strategies through modular design, transforming traditional water treatment projects into mass-producible intelligent equipment, creating a positive cycle of process optimization, digital empowerment, and product iteration [2] Group 2: Technological Innovations - The "Water Radish" AI system is a self-developed smart water plant management platform that enables unattended operations through AI technology [3] - The AI system includes features such as operational condition management, which monitors and optimizes process data in real-time, generating autonomous optimization tasks [4] - It also provides smart online inspections, generating comprehensive monitoring reports covering various operational aspects, allowing users to analyze data further [4] - The intelligent work order system autonomously dispatches tasks when anomalies are detected, ensuring a fully digital assessment and recording of task handling quality [5] Group 3: Financial Performance - As of December 31, 2024, the company had total orders amounting to 670.73 million yuan, a year-on-year decrease of 8.84% [6] - The breakdown of orders shows a decline in water treatment technology solutions by 15.67% and a slight decrease in wastewater resource products by 3.81% [6][7] - The gross profit for the year-to-date period was 223.23 million yuan, a slight increase of 0.12%, with a gross margin of 36.17% [8] - The company reported a main revenue of 129 million yuan for Q1 2025, a year-on-year increase of 17.17%, and a net profit of 11.56 million yuan, up 33.14% [10] Group 4: Future Outlook and Shareholder Returns - The company has established a three-year shareholder return plan for 2023-2025, with cash dividends of 4.10 yuan per 10 shares distributed to shareholders [10] - The total dividend amount over two years is projected to be approximately 100.17 million yuan [10] - The company aims to balance short-term shareholder returns with long-term development needs, reflecting a commitment to investor-centric growth [10]

Core Viewpoint - The report highlights the performance of Jinko Environment, indicating a mixed financial outlook with growth in certain segments and challenges in others, while emphasizing the potential of AI product upgrades and industrial applications to drive future growth [1][6]. Financial Performance Summary - In 2024, Jinko Environment achieved revenue of 617 million yuan, a year-on-year increase of 7.74%, with a net profit of 67 million yuan, down 5.62%. The gross margin was 36.17%, a decrease of 2.97 percentage points [2]. - The water treatment technology solutions segment generated revenue of 337 million yuan, a decline of 10.94%, while the long-term business segment saw revenue growth of 43.90% to 279 million yuan [2]. - For Q1 2025, revenue increased by 17% to 129 million yuan, with a net profit growth of 33% to 12 million yuan. The gross margin was 28.13%, down 6.66 percentage points [3]. - The backlog of orders as of Q1 2025 was 709 million yuan, a 3% increase from the previous quarter, indicating stable growth in B-end orders [4]. Business Segment Analysis - The B-end business revenue for Q1 2025 surged by 153% to 88 million yuan, while the G-end business revenue decreased by 44.98% to 42 million yuan [3]. - The wastewater resource recovery segment generated 114 million yuan in revenue, a 60.15% increase, while the deep drinking water treatment segment saw a significant decline of 59.91% [3]. Product and Technology Development - The company launched the AI smart agent "Water Radish," which has shown significant operational efficiency improvements, including a 60-70% reduction in operational team size and a 35% decrease in overall operational costs [5]. - The new industrial application projects, such as the New Water Island 2.0, are expanding, with multiple projects in various regions aimed at serving different industrial needs [5]. Profit Forecast and Investment Rating - The profit forecast for 2025-2026 has been adjusted downwards, with net profit estimates of 86 million yuan for 2025 and 104 million yuan for 2026, while 2027 is projected at 125 million yuan [6]. - The company maintains a "buy" rating, supported by policy drivers, product upgrades, and expanding sales channels [6].

Investment Rating - The investment rating for the company is "Buy" [1] Core Views - The company has shown a 33% year-on-year growth in Q1 2025, driven by the product upgrade in AI and continuous expansion in industrial application scenarios [1] - The company is recognized as an expert in wastewater resource utilization, with expectations for accelerated order replication due to policy drivers, product upgrades, and opened sales channels [1] Financial Performance Summary - For 2023A, total revenue was 572.76 million RMB, with a year-on-year decrease of 14.63%. The net profit attributable to shareholders was 70.77 million RMB, down 7.83% year-on-year [1] - In 2024A, total revenue is projected to be 617.11 million RMB, reflecting a growth of 7.74%, while the net profit is expected to be 66.79 million RMB, a decrease of 5.62% [1] - The company anticipates a revenue increase of 15.27% in 2025E, reaching 711.33 million RMB, with net profit expected to grow by 28.08% to 85.55 million RMB [1] Business Segment Analysis - The water treatment technology solutions segment generated revenue of 3.37 billion RMB in 2024A, a decline of 10.94%, while the mid-to-long-term business segment saw a revenue increase of 43.90% to 2.79 billion RMB [8] - In Q1 2025, the revenue from the water treatment technology solutions segment was 0.57 billion RMB, up 13.16%, while the mid-to-long-term business segment revenue was 0.72 billion RMB, an increase of 20.53% [8] Order Backlog and Growth - As of Q1 2025, the order backlog increased by 3% to 709 million RMB, with steady growth in B-end orders [8] - The company has successfully launched the AI intelligent body "Water Radish," which has significantly improved operational efficiency and reduced costs [8] Valuation and Earnings Forecast - The forecast for net profit attributable to shareholders has been adjusted down to 0.86 billion RMB for 2025 and 1.04 billion RMB for 2026, with an expected net profit of 1.25 billion RMB for 2027 [1] - The projected P/E ratios for 2025-2027 are 22, 18, and 15 respectively [1]