Core Viewpoint - China Water Investment Group celebrates its 20th anniversary, emphasizing its commitment to integrated urban and rural water supply, technological innovation, and green development to become a leading national water utility enterprise [1][2]. Group 1: Company Development - China Water has expanded its water treatment capacity from 190,000 cubic meters to 490,000 cubic meters, and the total length of its water supply network has increased from over 2,000 kilometers to more than 4,300 kilometers, serving a population that has grown from several hundred thousand to over 1.2 million [2]. - The company has evolved from a single water supply business to a comprehensive industry chain that includes integrated urban and rural water supply and smart water management [2]. - The establishment of the Huai'an Water Supply Company in collaboration with the Huai'an government has significantly contributed to the development of the water supply sector in Huai'an, showcasing a successful model of central-local cooperation [1][2]. Group 2: Technological and Environmental Initiatives - China Water has implemented smart management systems that monitor pipeline pressure, water quality, and urban-rural supply networks in real-time, representing a technological advancement in traditional water utility operations [1]. - The company has introduced direct drinking water services in various cities, including Huai'an, Yongkang, and Qingdao, and has developed three product lines along with two patent authorizations [2]. - Efforts in contract water-saving management have been piloted in multiple districts of Handan, exploring new models for comprehensive water conservation and extending its operations to a full industry chain that includes water supply, drainage, environmental management, and recycled water utilization [2].

Core Insights - The company reported a total revenue of HKD 12.2 billion for FY2025, a decrease of 5.1% year-on-year, and a net profit attributable to shareholders of HKD 1.075 billion, down 29.9% year-on-year [1][2] Revenue Breakdown - The company's main business revenue was HKD 11.656 billion, a decline of 9.4% year-on-year, primarily due to reduced income from water supply and direct drinking water installation, maintenance, and construction services [2] - Revenue from the urban water supply segment was HKD 7.498 billion, down 9.4% year-on-year, with segment profit slightly increasing by 0.1% to HKD 2.493 billion due to cost control [2] - The direct drinking water segment saw revenue drop by 61.9% to HKD 0.657 billion, with segment profit decreasing by 58.9% [2] - The environmental protection segment achieved revenue of HKD 1.523 billion, up 42.2% year-on-year, with segment profit increasing by 56.9% [2] - Total construction revenue was HKD 0.664 billion, down 19.7% year-on-year, with segment profit decreasing by 9.3% [2] - Property revenue reached HKD 0.361 billion, with segment profit increasing by 16.5% [2] Operational Performance - Water supply operations generated revenue of HKD 3.526 billion, an increase of 6.5% year-on-year, with water sales volume rising by 7.4% to 1.5 billion tons [3] - The average water price was HKD 2.35 per ton, with over 20 projects initiating price adjustment procedures [3] - Direct drinking water operations revenue increased by 7.2% to HKD 0.315 billion, with a compound annual growth rate of 29.8% from FY22 to FY25 [4] - Direct drinking water equipment revenue surged by 226.3% to HKD 0.078 billion [4] Capital Expenditure and Cash Flow - Capital expenditure peaked at HKD 5.33 billion in FY2024 and is projected to decrease to HKD 3.4 billion in FY2025, with a target of under HKD 2 billion for FY2026 [4] - The company maintained a stable total dividend of HKD 0.28 per share, with a dividend payout ratio of 42.5%, reflecting a year-on-year increase of 12.7 percentage points [4] Profit Forecast - The decline in FY2025 performance was primarily due to one-time impairment losses, with net profit forecasts for FY2026 and FY2027 adjusted down to HKD 1.372 billion and HKD 1.387 billion, respectively [4] - The projected net profit for FY2028 is HKD 1.415 billion, corresponding to price-earnings ratios of 7.2, 7.1, and 6.9 times for FY2026, FY2027, and FY2028 [4]

Group 1 - The company reported a revenue of HKD 11.657 billion and a profit attributable to shareholders of HKD 1.075 billion for the fiscal year ending March 31, 2025, with a basic earnings per share of HKD 0.66 and a proposed final dividend of HKD 0.15 per share [1] - The company is benefiting from a low inflation environment and the acceleration of market-oriented water price adjustments, with cities like Guangzhou and Shenzhen recently implementing water price reform, which is expected to catalyze price increases in other cities [1] - The overall resilience of the water industry is highlighted, with a gradual improvement in profitability and a trend of declining financing costs due to interest rate cuts and reserve requirement ratio reductions [1] Group 2 - The company aims to adhere to its mission of "water as the foundation, benefiting society" by leveraging policy dividends and technological innovations to promote a sustainable development model that combines light and heavy assets [2] - The focus will be on the main track of "quality differentiated water supply," enhancing the synergy between water supply and direct drinking water businesses, and upgrading technology and services to transition from "safe water" to "healthy water" [2] - The company plans to seize opportunities for green and low-carbon transformation, expand the coverage of direct drinking water projects, and create differentiated competitive advantages to foster sustainable growth and meet public demand [2]