Group 1 - The establishment of the South-to-North Water Diversion (Golmud) Water Network Co., Ltd. has been announced, with a registered capital of 100 million yuan [1] - The legal representative of the new company is Yang Hongyu, and its business scope includes water resource management, wind power technology services, power generation technology services, emerging energy technology research and development, solar power technology services, and energy storage technology services [1] - The company is wholly owned by China South-to-North Water Diversion Group Co., Ltd. through its subsidiary, China South-to-North Water Diversion Group Qinghai Co., Ltd. [1]

EMAE Acquisition Overview - EMAE focuses on hydroelectric power generation with an operational installed capacity of 961 MW and a physical guarantee of 162 MWavg[10, 12] - EMAE manages water resources, including the Billings Reservoir, aiming for effective use by SABESP by 2027[10] - EMAE's Net Revenue is R$541 million, Net Income is R$67 million, and Adjusted EBITDA is R$154 million (2Q25 LTM)[12] Strategic Rationale - The acquisition aims to expand water storage capacity by 52% with full integration of the Billings system by 2029[15] - The acquisition enhances system resilience by adding +7 m³/s of operational flexibility (+10% of treated water supply) from 2026 to 2029[15] - The transaction allows direct participation over critical water sources, integrating the Billings-Pinheiros-Tietê system[19] Transaction Details - SABESP will acquire 74.9% of EMAE's voting shares and 66.8% of its non-voting shares, representing 70.1% of the total capital[31] - The transaction is expected to close in 4Q25-1Q26, subject to regulatory approvals[35]

Core Viewpoint - The inclusion of Guozhong Water (600187.SH) in the Shanghai-Hong Kong Stock Connect marks a significant milestone, enhancing its capital market recognition and international influence, thereby injecting new momentum into its diversified business development and transformation efforts [1][2]. Group 1: International Market Expansion - The entry into the Shanghai-Hong Kong Stock Connect provides Guozhong Water with a vital international showcase, allowing for better capital flow and market structure optimization [2]. - This inclusion is expected to significantly enhance Guozhong Water's visibility and brand image in the international capital market, facilitating international collaboration in technology introduction, project cooperation, and overseas market expansion [2][3]. - The company aims to leverage international financing channels and perspectives to improve its technological research and development, attract high-end talent, and pursue quality project mergers and acquisitions [2][5]. Group 2: Corporate Governance and Operational Efficiency - Being part of the Stock Connect will subject Guozhong Water to scrutiny from a broader range of market participants, including international investors, which will drive improvements in corporate governance and information disclosure [3]. - The company is committed to enhancing operational standardization and internationalization, thereby increasing its overall competitiveness and risk resilience [3]. Group 3: Strategic Growth and Innovation - Guozhong Water is focusing on green growth and strategic upgrades, responding to national dual carbon goals through technological innovation and enhancing competitiveness in the environmental protection industry [4]. - The company is actively adjusting its business structure to explore new fields such as renewable energy, green health food, new environmental materials, energy-saving technologies, and smart industries, creating a new model for cross-industry integration [4][5]. - Continuous deepening of green transformation and optimization of business segments are key strategies for Guozhong Water to enhance its core competitiveness and profitability [5].