Core Viewpoint - Tianye Water-saving (00840.HK) is expected to report an estimated net loss of approximately RMB 15.499 million for the six months ending June 30, 2025, following a net profit of approximately RMB 13.857 million for the period ending June 30, 2024, primarily due to changes in market conditions and government policy adjustments [1] Group 1 - The anticipated net loss is mainly attributed to a significant reduction in the number of high-standard farmland construction projects, leading to a substantial decline in the sales volume of the company's PVC pipe products [1] - The decrease in project numbers has resulted in a corresponding drop in engineering business revenue, which has further contributed to the overall decline in gross profit levels from engineering projects and product sales [1]

Core Viewpoint - Tianye Water Saving (00840) anticipates a net loss of approximately RMB 15.499 million for the six months ending June 30, 2025, while projecting a net profit of about RMB 13.857 million for the period ending June 30, 2024 [1] Group 1 - The expected net loss is primarily attributed to significant reductions in the number of high-standard farmland construction projects due to changes in market conditions and government policy adjustments [1] - The company's sales volume of PVC pipes has drastically declined, leading to a corresponding decrease in engineering business revenue [1] - The overall gross profit level from engineering projects and product sales has significantly decreased, resulting in the anticipated loss [1]

Core Viewpoint - Tianye Water Saving (00840) anticipates a net loss of approximately RMB 15.499 million for the six months ending June 30, 2025, while projecting a net profit of about RMB 13.857 million for the period ending June 30, 2024 [1] Group 1 - The expected net loss is primarily attributed to significant reductions in the number of high-standard farmland construction projects due to changes in market conditions and government policy adjustments [1] - The company's sales volume of PVC pipe products has drastically declined, leading to a corresponding decrease in engineering business revenue [1] - The overall gross profit level from engineering projects and product sales has significantly decreased, resulting in the anticipated loss [1]

Investment Rating - The investment rating for the company is "Buy" with a target price of RMB 14.53 [7][9]. Core Views - The company reported a revenue of RMB 2.078 billion for 1H25, a year-on-year decrease of 11.33%, and a net profit attributable to shareholders of RMB 271 million, down 20.25% year-on-year. The second quarter showed a revenue of RMB 1.183 billion, down 12.16% year-on-year but up 32.14% quarter-on-quarter, indicating that revenue and profit met previous expectations [1][2]. - The company is experiencing a slow recovery in pricing, with overall gross margin under pressure. The gross margin for 1H25 was 40.5%, a decrease of 1.61 percentage points year-on-year [2][3]. - The company is maintaining a stable retail brand presence, which is expected to benefit from urban renewal and renovation demand in the second-hand housing market [4]. Summary by Sections Financial Performance - In 1H25, the company's PPR/PE/PVC pipe business generated revenues of RMB 933 million, RMB 411 million, and RMB 290 million, respectively, with year-on-year declines of 13.04%, 13.28%, and 4.21%. The overall revenue decline is attributed to weak retail momentum and increased price competition in the plastic pipe industry [2]. - The net profit margin for 1H25 was 13.04%, down 1.46 percentage points year-on-year, but the decline in net profit margin for 2Q25 showed a narrowing trend [3]. Dividend Policy - The company plans to distribute a cash dividend of RMB 1 per 10 shares (including tax), resulting in a payout ratio of approximately 58% [4]. Profit Forecast and Valuation - The profit forecasts for 2025-2027 have been revised downwards by 20.39%, 15.67%, and 13.81%, respectively, with projected net profits of RMB 857 million, RMB 1.037 billion, and RMB 1.264 billion [5]. - The target price has been adjusted to RMB 14.53, based on a 27x PE valuation for 2025 [5].