Investment Rating - The report maintains a "Hold" rating for the company [5] Core Views - The company reported a revenue of 1.14 billion yuan in 2024, a year-on-year increase of 1.12%, while the net profit attributable to the parent company was 150 million yuan, down 5.89% year-on-year [2] - The company is facing short-term pressure but anticipates improvements with the implementation of a water price adjustment plan [3] - Cost reduction and efficiency improvement measures have shown significant results, with a notable decrease in chemical costs despite an increase in wastewater treatment volume [4] - The company is actively expanding its overseas business in South Asia, Southeast Asia, and the Middle East, leveraging the "Belt and Road" initiative for growth opportunities [5] Financial Summary - In 2024, the company achieved an operating income of 1.14 billion yuan, with a projected increase to 1.16 billion yuan in 2025 and 1.26 billion yuan in 2026 [7] - The net profit is expected to recover to 170 million yuan in 2025 and 197 million yuan in 2026, with a further increase to 216 million yuan in 2027 [7] - The earnings per share (EPS) for 2025 is projected at 0.40 yuan, increasing to 0.47 yuan in 2026 and 0.51 yuan in 2027 [7]

Core Viewpoint - The company reported its 2024 annual results and Q1 2025 results, showing a slight increase in revenue but a decline in net profit, indicating short-term pressure while anticipating improvements from water price adjustments [1][2]. Financial Performance - In 2024, the company achieved operating revenue of 1.14 billion yuan, a year-on-year increase of 1.12%; net profit attributable to shareholders was 150 million yuan, down 5.89%; and net profit excluding non-recurring items was 95 million yuan, down 21.37% [1]. - For Q1 2025, the company reported operating revenue of 253 million yuan, a year-on-year increase of 7.47%; net profit attributable to shareholders was 13 million yuan, down 62.76%; and net profit excluding non-recurring items was 8 million yuan, down 52.09% [1]. - The company plans to distribute a cash dividend of 1.50 yuan per 10 shares (before tax) for 2024 [1]. Operational Highlights - The company achieved a water sales volume of 1.95 billion cubic meters in 2024, a year-on-year increase of 1.02%; the settlement volume for wastewater treatment and resource utilization was 1.60 billion cubic meters, up 4.78% [2]. - The construction of the fifth phase of the Suqian No. 2 Water Plant is underway, which will increase the water supply capacity in the Suqian area from 430,000 m³/day to 550,000 m³/day [2]. - The company implemented a precise dosing system, resulting in a 4.78% increase in wastewater treatment volume while reducing chemical costs by 5.56%, improving cost structure [2]. Strategic Initiatives - The company is actively expanding its overseas market presence in South Asia, Southeast Asia, and the Middle East, where there is significant growth potential in the water supply and wastewater treatment sectors [3]. - The Dhaka project in Bangladesh is currently operational, with the second phase's design and procurement processes underway [3]. - The company aims to leverage the "Belt and Road" initiative to establish a second growth curve through new overseas water projects [3]. Profit Forecast and Investment Recommendations - The anticipated water price adjustment is expected to improve performance; significant cost reduction and efficiency gains are noted, benefiting from "volume and price increase" [3]. - The company forecasts net profits attributable to shareholders of 170 million yuan in 2025, 197 million yuan in 2026, and 216 million yuan in 2027, with corresponding EPS of 0.40, 0.47, and 0.51 yuan per share [3].