Investment Rating - The report maintains a "Buy" rating for the company with a target price of RMB 18.67 [7][5]. Core Views - The company has shown significant profit growth, with a 21% increase in net profit in Q2, driven by an increase in waste processing volume and electricity generation [1]. - The company is focusing on expanding its waste processing capabilities, particularly in municipal solid waste and industrial waste, which is expected to sustain double-digit net profit growth from 2025 to 2027 [1][4]. - The operational efficiency has improved, with a gross margin of 43.36% in H1 2025, and a notable reduction in financial expenses due to loan repayments and lower interest rates [2]. Summary by Sections Financial Performance - In H1 2025, the company achieved revenue of RMB 2.065 billion, a year-on-year increase of 12.60%, and a net profit of RMB 461 million, up 9.32% year-on-year [1]. - Q2 2025 revenue reached RMB 1.160 billion, reflecting a year-on-year growth of 28.11% and a quarter-on-quarter growth of 28.18% [1]. - The company reported a net profit of RMB 265 million in Q2 2025, which is a 21.17% increase year-on-year and a 34.61% increase quarter-on-quarter [1]. Operational Highlights - The company processed 5.3583 million tons of waste in H1 2025, an increase of 28.3% year-on-year, primarily due to stable growth in incoming municipal solid waste [3]. - The electricity generated was 2.576 billion kWh, with grid-connected electricity increasing by 9.4% year-on-year [3]. - The company has expanded its waste sources, including industrial solid waste and municipal sludge, and has successfully increased its operational scale through acquisitions [4]. Profit Forecast and Valuation - The company is projected to have earnings per share (EPS) of RMB 1.02, 1.15, and 1.29 for the years 2025, 2026, and 2027, respectively [5]. - The report assigns a price-to-earnings (PE) ratio of 18.3 for 2025, based on the company's strong profitability and commitment to a dividend payout ratio of no less than 60% [5].

Core Viewpoint - The report highlights that Yongxing Co., Ltd. has achieved significant revenue and profit growth in the first half of 2025, driven by increased waste processing capacity and operational efficiency, leading to a "buy" rating from Dongwu Securities [1][2]. Financial Performance - In H1 2025, the company reported revenue of 2.065 billion yuan, a year-on-year increase of 12.60%, and a net profit attributable to shareholders of 461 million yuan, up 9.32% [2]. - The gross margin for the waste incineration power generation business was 43.3%, reflecting a slight increase of 0.54 percentage points year-on-year [2]. - The company achieved a free cash flow of 670 million yuan, representing a 34.0% increase year-on-year, indicating strong cash flow health [4]. Operational Highlights - The company operates 16 waste incineration power generation projects with a total capacity of 34,690 tons per day, all of which are operational [2]. - The total waste processed by the incineration projects reached 5.3583 million tons in H1 2025, with a capacity utilization rate of 84.6% [2]. - The company has expanded its waste processing services by incorporating various waste types, significantly enhancing the utilization rate of its incineration projects [3]. Strategic Initiatives - Yongxing Co., Ltd. is actively pursuing external project expansions and acquisitions to enhance its operational scale and regional presence, including increasing its stake in Jiejin Company from 49% to 90% [3]. - The company is also focusing on combined heat and power generation, with steam supply to surrounding industrial enterprises reaching 88,300 tons in H1 2025 [3]. Future Outlook - The company maintains a positive outlook for net profit growth, projecting net profits of 917 million yuan, 1.017 billion yuan, and 1.087 billion yuan for 2025, 2026, and 2027, respectively, with corresponding growth rates of 11.7%, 11.0%, and 6.9% [4].

Core Viewpoint - The company, Yongxing Co., Ltd. (601033), reported a positive financial performance for the first half of 2025, with significant growth in revenue and net profit, indicating a sustained upward trend in profitability and operational efficiency [1][2]. Financial Performance - The company achieved an operating revenue of 2.065 billion yuan, representing a year-on-year increase of 12.60% [1] - The net profit attributable to shareholders was 461 million yuan, reflecting a year-on-year growth of 9.32% [1] Operational Highlights - During the first half of the year, the company enhanced its collaborative disposal of existing waste, processing over 800,000 tons of waste, which significantly improved the capacity utilization rate of its waste-to-energy projects [1] - The total amount of waste processed at the waste-to-energy projects reached 5.3583 million tons, generating 2.576 billion kWh of electricity, with 2.205 billion kWh being fed into the grid [1] Business Expansion - The company provided a total of 88,300 tons of steam to surrounding industrial enterprises, indicating growth in its heating business [1] - The company is extending its heating network to cover surrounding industrial areas and has launched multiple mobile energy storage heating projects, suggesting promising future growth in the heating sector [1] - The acquisition of a controlling stake in Xinzhou Jiejin Company has been completed, adding 2,600 tons/day of waste-to-energy capacity and 300 tons/day of biomass processing capacity to the company’s operations [1] Technological Advancements - The company has made continuous investments in technology development, including smart power plant applications, SNCR liquid high polymer denitrification processes, and next-generation mobile energy storage heating equipment, which have effectively enhanced the operational efficiency of its core business [2] Dividend Distribution - The company completed its profit distribution for 2024, distributing cash dividends of 540 million yuan, with a dividend of 6.0 yuan (pre-tax) per 10 shares, resulting in a payout ratio of 65.81%, demonstrating its commitment to shareholder returns [2]