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].