Core Viewpoint - Haixia Environmental Protection is a leading wastewater treatment company in Fujian Province, established in 2002 and listed on the Shanghai Stock Exchange in 2017, focusing on municipal wastewater treatment services and possessing full industry chain service capabilities [1] Financial Performance - For Q3 2025, Haixia Environmental reported revenue of 1.002 billion yuan, ranking 24th among 51 companies in the industry, with the industry leader, Chuangshuo Environmental, generating 13.453 billion yuan [2] - The company's net profit for the same period was 183 million yuan, placing it 14th in the industry, while the top performer, Chuangshuo Environmental, achieved a net profit of 1.908 billion yuan [2] Profitability and Debt Ratios - As of Q3 2025, Haixia Environmental's debt-to-asset ratio was 53.24%, higher than the industry average of 49.82%, but improved from 55.93% in the previous year [3] - The company's gross profit margin stood at 43.61%, exceeding the industry average of 32.13% and slightly up from 41.83% year-on-year [3] Executive Compensation - The president of Haixia Environmental, Zhuo Xianwen, received a salary of 597,000 yuan in 2024, an increase of 20,500 yuan from 2023 [4] Shareholder Information - As of September 30, 2025, the number of A-share shareholders increased by 13.11% to 29,300, while the average number of circulating A-shares held per shareholder decreased by 11.59% to 19,400 [5]

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected relative return of over 20% within the next six months [5][23]. Core Views - The company experienced a significant decline in performance, with a 14.43% decrease in revenue and a 68.99% drop in net profit for the year, leading to a proposed cash dividend of 0.80 CNY per 10 shares, resulting in a high payout ratio of 111.8% [1][4]. - The company is focusing on dual business operations, optimizing costs, and expanding overseas, which has shown resilience despite a 21.80% decline in revenue from its comprehensive technical services segment [2][4]. - The company is actively pursuing growth in the new materials sector and has achieved profitability in its overseas production bases, aligning with the "Belt and Road" initiative [2][4]. Financial Performance Summary - In 2024, the company reported total revenue of 261.7 million CNY, with a projected revenue growth of 5.29% in 2025 [4][17]. - The overall gross margin for 2024 was 22.16%, reflecting a decrease of 2.69 percentage points year-on-year, while the fourth quarter showed a slight recovery in gross margin [3][4]. - The company’s net profit for 2024 is projected to be 49.26 million CNY, with significant growth expected in subsequent years [4][17]. Business Segments Overview - The comprehensive technical services business generated 329 million CNY in revenue, down 21.80% year-on-year, but managed to maintain a gross margin of 38.60% due to effective cost control [2][4]. - The new materials segment reported a revenue of 1.955 billion CNY, with a slight decline in sales volume but a notable market share in various regions [2][4]. Future Outlook - The company is expected to see a gradual recovery in net profit, with projections of 170.16 million CNY in 2025 and 218.74 million CNY in 2026 [4][17]. - The strategic focus on dual business operations in the fields of additives and testing services is anticipated to drive future growth, particularly in emerging sectors like renewable energy and AI smart buildings [4][17].