Core Viewpoint - The company, Huicheng Environmental Protection (300779.SZ), is involved in the recovery of rare earth elements through its waste catalyst treatment process, utilizing proprietary technology for resource utilization [1]. Group 1 - The company has confirmed that its business includes the recovery of rare earth elements from waste catalysts [1]. - The extracted rare earth elements are primarily used in the production of resource utilization products, such as new FCC catalysts [1].

Group 1 - The core point of the article highlights the recent decline in the stock price of Huicheng Environmental Protection, which fell by 5.03% to 166.20 CNY per share, with a trading volume of 1.09 billion CNY and a turnover rate of 3.97%, resulting in a total market capitalization of 32.763 billion CNY [1] - Huicheng Environmental Protection, established on February 27, 2006, and listed on May 22, 2019, primarily provides waste catalyst treatment services for refining enterprises and develops, produces, and sells FCC catalysts and other resource utilization products. The revenue composition includes hazardous waste treatment services (62.93%), resource utilization products (30.15%), and other services [1] Group 2 - From the perspective of major fund holdings, Southern Fund has a significant position in Huicheng Environmental Protection, with the Southern CSI 1000 ETF holding 1.2685 million shares, accounting for 0.35% of the fund's net value, ranking as the third-largest holding. The estimated floating loss today is approximately 11.163 million CNY [2] - The Southern CSI 1000 ETF, managed by Cui Lei, has a total asset size of 64.953 billion CNY and has achieved a year-to-date return of 28.58%, ranking 2093 out of 4221 in its category, with a one-year return of 34.04%, ranking 1521 out of 3848 [2][3]

Core Viewpoint - Huicheng Environmental Protection is facing dual challenges of declining performance and reliance on major clients, prompting the company to seek a breakthrough through a targeted private placement to raise funds for environmental projects and working capital [2][7]. Performance Fluctuations - In the first half of 2025, Huicheng Environmental Protection reported revenue of 564 million yuan, a year-on-year decline of 5.09%, and a net profit attributable to shareholders of 5.02 million yuan, down 85.64% [4]. - The company experienced significant revenue growth in 2023, with revenue soaring to 1.071 billion yuan, a 194.76% increase, and net profit reaching 139 million yuan, up 5499.75%, primarily due to the successful launch of a project by its subsidiary [3]. - However, in 2024, revenue growth slowed to 1.149 billion yuan, a 7.33% increase, while net profit fell to 42.6 million yuan, down 69.24% [3]. Client Dependency - Huicheng Environmental Protection is heavily reliant on China National Petroleum Corporation (CNPC), with sales revenue from CNPC accounting for 69.12%, 61.62%, and 66.14% of its main business income in 2023, 2024, and the first half of 2025, respectively [5]. - The company is the sole supplier for the high-sulfur petroleum coke hydrogen ash utilization project for Guangdong Petrochemical, which raises concerns about the stability of its revenue stream [5][6]. Capital Expansion - Despite the challenges, Huicheng Environmental Protection is proceeding with a private placement to raise funds for projects in the Jieyang Dannan Sea Petrochemical Industrial Zone, including general industrial solid waste treatment and environmental resource utilization [7][8]. - The strategic expansion is seen as a response to favorable market prospects and aims to enhance the company's product diversification, including increasing the production of molecular sieves and catalytic agents [9].