Core Viewpoint - The stock of Chengfa Environment has experienced fluctuations, with a recent decline in price and mixed performance over different time frames, indicating potential volatility in the market [1][2]. Company Overview - Chengfa Environment Co., Ltd. is located in Zhengdong New District, Zhengzhou, Henan Province, and was established on December 31, 1998, with its listing date on March 19, 1999 [2]. - The company primarily engages in highway investment, construction, and operation management, with its revenue composition as follows: solid waste treatment and sanitation business 58.10%, highway business 20.29%, environmental solution integration services 10.98%, water treatment business 7.22%, and others 3.41% [2]. Financial Performance - For the first half of 2025, Chengfa Environment achieved operating revenue of 3.216 billion yuan, representing a year-on-year growth of 11.25%, and a net profit attributable to shareholders of 589 million yuan, reflecting a year-on-year increase of 20.15% [2]. - The company has distributed a total of 873 million yuan in dividends since its A-share listing, with 496 million yuan distributed over the past three years [3]. Shareholder Information - As of June 30, 2025, the number of shareholders of Chengfa Environment was 20,200, a decrease of 0.64% from the previous period, with an average of 31,724 circulating shares per person, an increase of 0.65% [2]. - Among the top ten circulating shareholders, Hong Kong Central Clearing Limited holds 5.4704 million shares, an increase of 130,400 shares compared to the previous period, while the Southern CSI 1000 ETF has reduced its holdings by 62,300 shares [3].

Core Insights - The company reported steady growth in performance, with an increase in revenue and net profit for both 2024 and Q1 2025, driven by its environmental operations and stable cash flow from highway business [2][5] Financial Performance - In 2024, the company achieved operating revenue of 6.611 billion yuan, a year-on-year increase of 1% - The net profit attributable to shareholders was 1.141 billion yuan, up 6% year-on-year - For Q1 2025, operating revenue reached 1.536 billion yuan, reflecting a 13% year-on-year growth - The net profit attributable to shareholders for Q1 2025 was 273 million yuan, a 22% increase year-on-year [1][2] Business Segments - Solid waste treatment and sanitation services generated revenue of 3.388 billion yuan, a 27% increase year-on-year, with a gross margin of 40.78% - Environmental solution integration services saw revenue decline by 28% to 1.268 billion yuan, but gross margin improved by 2.09 percentage points to 24.74% - Water treatment business revenue increased by 22% to 383 million yuan - Highway business revenue decreased by 6% to 1.350 billion yuan [2][3] Operational Efficiency - In solid waste management, the company processed 11.6672 million tons of waste, a 13.12% increase, and generated 3.42 billion kWh of electricity, an 18.04% increase - The hazardous waste disposal projects significantly increased processing volume to 48,300 tons, a 94.15% year-on-year growth - The company expanded its sanitation services, winning 10 new projects in Henan province and acquiring three sanitation projects, resulting in a contract value increase of 90.78% [3][4] Water and Highway Business - The water treatment segment benefited from integrated management, achieving a wastewater treatment volume of 2.22 billion tons, a 136.84% increase - The highway business experienced a decline in toll revenue to 1.313 billion yuan, down 5.52% due to reduced truck traffic, but maintained stable cash flow [4][5] Profit Forecast - The company is expected to achieve operating revenues of 6.796 billion yuan, 7.269 billion yuan, and 7.875 billion yuan for 2025, 2026, and 2027, respectively, with year-on-year growth rates of 2.80%, 6.96%, and 8.34% - Net profits are projected to be 1.227 billion yuan, 1.379 billion yuan, and 1.546 billion yuan for the same years, with growth rates of 7.48%, 12.37%, and 12.16% [5]