China Everbright Water Limited (2025 Interim Results): Financial Analysis and Investor Insights
China Everbright Water Limited (“Everbright Water”) released its 2025 interim results, offering investors a detailed look at its operational and financial performance for the first half of 2025. The company, a leading player in China’s water and environmental sector, maintained a stable operational profile amidst a challenging and evolving market environment.
Key Financial Metrics and Performance Review
| Metric |
2025 H1 |
2024 H2 |
2024 H1 |
YoY Change |
HoH Change |
| Revenue (HK\$ ‘000) |
3,279,565 |
N/A |
3,352,595 |
-2% |
N/A |
| Gross Profit (HK\$ ‘000) |
1,369,235 |
N/A |
1,269,233 |
+8% |
N/A |
| Gross Margin (%) |
42 |
N/A |
38 |
+4ppt |
N/A |
| EBITDA (HK\$ ‘000) |
1,194,117 |
N/A |
1,196,486 |
-0.2% |
N/A |
| Net Profit (Attributable, HK\$ ‘000) |
563,760 |
N/A |
581,146 |
-3% |
N/A |
| EPS (HK cents) |
19.71 |
N/A |
20.31 |
-3% |
N/A |
| Interim Dividend (HK cents) |
6.09 |
N/A |
6.09 |
0% |
N/A |
Key observations:
- Revenue declined slightly by 2% YoY, while gross profit rose 8% due to margin expansion (from 38% to 42%).
- Attributable net profit and EPS both declined by 3% YoY, indicating modest pressure on bottom-line growth.
- The interim dividend remains unchanged from the previous year at 6.09 HK cents per share, reflecting a stable payout policy.
Segment Revenue Analysis
| Segment |
2025 H1 (HK\$ ‘000) |
2024 H1 (HK\$ ‘000) |
Change |
| Construction Services |
1,164,178 |
1,355,412 |
-14% |
| Operating Revenue |
1,476,891 |
1,301,259 |
+14% |
| Financial Revenue |
558,812 |
564,327 |
-1% |
| Equipment Sales & Tech Services |
79,684 |
131,597 |
-39% |
The company’s revenue structure is shifting, with a clear increase in recurring operating revenue as new projects ramp up, offsetting declines in construction services and equipment sales. This transition is expected given the maturing project portfolio.
Balance Sheet and Capital Position
- Total assets increased to HK\$38.2 billion (up from HK\$35.9 billion at 2024 year-end).
- Total liabilities rose to HK\$23.4 billion, with a stable leverage ratio (total liabilities/total assets) at 61.2%.
- Equity attributable to shareholders climbed to HK\$12.6 billion, bolstering book value.
- Strong liquidity with HK\$1.87 billion in cash and HK\$5.08 billion in undrawn bank lines, supporting future growth.
- Borrowings totaled HK\$17.26 billion, with 78% in long-term funding, reducing refinancing risk.
Operational and Strategic Highlights
- Expansion and Diversification: The business footprint spans 13 provinces in China and overseas markets (e.g., Mauritius), with 170 investment projects held and 13 additional asset-light service contracts. The total designed water treatment and supply capacity exceeds 7.6 million m3/day.
- Efficiency Initiatives: Ongoing cost control and digital supply chain upgrades have improved operational efficiency. Notably, in-plant solar energy installations (20MW) were rolled out, producing 20 million kWh/year.
- ESG and Management: A new CEO (熊建平) was appointed in July 2025, and a Sustainability Committee was established to elevate ESG governance.
- Funding and Debt Management: Three medium-term note issuances in 2025 raised RMB 32 billion at record low interest rates for the sector, supporting both working capital and refinancing needs.
Risks and Notable Events
- No exceptional items, asset revaluations, or unusual fund flows were disclosed.
- No mention of legal disputes, divestments, or share buybacks in this reporting period.
- The company continues to focus on receivables collection and cash flow improvement as key priorities.
Outlook and Strategic Initiatives
Management emphasized a “dual breakthrough” strategy—targeting both scale and efficiency. The plan involves bold market expansion, operational discipline, digital transformation, and enhanced cash collection. There is a clear intent to transform from a traditional water utility into a technology-driven environmental services provider.
Conclusion and Investment Recommendations
Overall Assessment: Everbright Water delivered a resilient performance in 2025 H1, with improved gross margins and operating revenue mix despite a modest decline in total revenue and net profit. Its balance sheet remains robust, liquidity is ample, and the company is proactively managing funding costs and operational risks. The unchanged interim dividend demonstrates management’s confidence in cash generation and commitment to shareholders.
- If you currently hold the stock: Hold. The company’s operational stability, healthy capital structure, and strategic pivot towards higher-value recurring revenue streams support continued ownership. The stable dividend and improving efficiency offset short-term profit softness.
- If you do not currently hold the stock: Consider accumulating on weakness. The company’s shift to asset-light models, ESG focus, and strong liquidity position it well for medium-term growth. Monitor for evidence of sustained profit recovery and successful receivables management before taking a large position.
Disclaimer: This analysis is based solely on information disclosed in the company’s latest interim report. It does not constitute investment advice. Investors should consider their own financial situation and consult professional advisors before making investment decisions.
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