Zheneng Jinjiang Environment Holding Company Limited: 1H2025 Financial Results Analysis

Zheneng Jinjiang Environment Holding Company Limited (“the Group”) released its unaudited condensed interim financial statements for the half year ended 30 June 2025. The Group is a leading waste-to-energy (WTE) operator in China, engaged in electricity and steam generation, waste treatment, and related technical and management services.

Key Financial Highlights

* Inferred 2H2024 results as the report provides only 1H and FY numbers. Calculated as FY2024 minus 1H2024.
† Half-on-half (HoH) change inferred by comparing 1H2025 with 2H2024.

Historical Performance Trends

• Revenue: Slight YoY increase of 0.6% in 1H2025, continuing a trend of revenue stability as the Group matures and as project construction slows temporarily.
• Profitability: Net profit surged by 62.3% YoY, with gross profit margin improving from 35.1% to 38.4%. This was mainly due to operational improvements, technical upgrades, and enhanced cost control.
• EPS: EPS grew from 14.23 to 23.04 RMB cents, reflecting the higher profitability, while the number of shares outstanding decreased due to share buybacks.

Exceptional Earnings and Expenses

• Exceptional Losses: The prior year (1H2024) results were negatively impacted by a RMB31.3 million loss on disposal of Indian subsidiaries, which did not recur in 1H2025.
• Impairments: No impairment losses were recorded in 1H2025, compared to RMB9.0 million of impairments in 1H2024.
• Foreign Exchange & Derivative Losses: 1H2025 saw higher foreign exchange losses (RMB26.3m vs RMB10.7m) and higher losses on derivatives, mainly due to US dollar loan repayments.

Dividends

• No interim dividend was declared for 1H2025. The company typically recommends dividends in its full-year results.
• Previous dividend: A dividend of RMB182.6 million (approx. 12.65 cents per share) was paid for FY2024.

Share Buybacks and Capital Structure

• Treasury Shares: The company repurchased 14,697,300 shares in 1H2025, increasing treasury shares to 16,626,000 (representing 1.16% of issued shares).
• No new shares were issued, and there was no dilution.

Cash Flow and Balance Sheet

• Operating cash flow: Net cash generated from operations was RMB457.4 million, up from RMB428.5 million in 1H2024.
• Investing cash flow: Significant outflow of RMB749.8 million, mainly due to continued capital expenditure on new and expanding projects.
• Financing cash flow: Net inflow of RMB214.8 million, driven by new borrowings, offset by repayments, dividends, and share buybacks.
• Net cash position: Cash at period end was RMB516.3 million, down from RMB600.4 million at the start of the year.
• Net asset value per share: Rose from 533.78 RMB cents to 546.37 RMB cents.
• Working capital: The Group remains in a negative working capital position (current liabilities exceed current assets by RMB969 million), mainly due to borrowings due within 12 months. The Board asserts the Group remains a going concern due to strong banking support and undrawn credit lines.

Segment Performance

• Waste-to-Energy (WTE) Operations: Core revenue and profits stem from WTE business, which saw improvements in operational efficiency and by-product revenue.
• Project Technical and Management Services: Remain a very small portion of total revenue and profit.

Macroeconomic and Regulatory Environment

• Policy Support: The Chinese government continues to support the WTE sector through infrastructure policies, green bond financing, and green certificate markets. These policies may support future upgrades and operational income for the Group.
• Economic Conditions: China’s GDP grew 5.3% YoY in 1H2025, with robust energy sector development and environmental policy momentum.

Operational and Corporate Developments

• Project Expansion: The Group commissioned new kitchen waste treatment capacity and continues to upgrade and expand several facilities, aiming to increase total capacity to 58,205 tonnes/day and 1,212MW upon completion of ongoing projects.
• Asset Closure and Compensation: The Group is working with local governments to secure compensation for closed facilities, though some delays are noted due to local real estate market weakness.
• Technology & ESG: The Group received a national award for innovation in solid waste energy conversion and continues to open its facilities for public environmental education.

Related Party Transactions

• Material RPTs: RMB16.8 million in related party transactions in 1H2025, mainly interest expense and purchases from entities affiliated with the controlling shareholder. These are within the scope of approved mandates and are not unusually high.

Chairman’s Statement

The Chairman’s statement is positive in tone, highlighting the resilience of China’s economy, supportive policies for the WTE sector, ongoing project expansion, and continued focus on technology and ESG leadership. The Group sees a stable policy environment and remains committed to high-quality, sustainable growth.

Conclusion: Outlook and Overall Assessment

Zheneng Jinjiang Environment delivered a solid set of results for 1H2025. Operating metrics and profitability improved meaningfully YoY, driven by operational upgrades, improved cost control, and the absence of exceptional losses seen in 2024. While revenue growth was modest, the Group’s margin and net profit gains are noteworthy. The balance sheet remains leveraged, and negative working capital persists, but management asserts strong support from state-owned shareholders and banks. No interim dividend was declared, consistent with prior practice.

Looking ahead, policy and macroeconomic tailwinds, combined with continued project expansion and technological innovation, position the Group for further growth. Risks include ongoing negative working capital, exposure to interest rates, and reliance on government compensation for closed assets. Overall, the outlook is positive, with strong performance momentum and supportive sector fundamentals.

View Zheneng Jinjiang Historical chart here