Kangda Env (06136.HK) announced its interim performance on August 29. In the first half of 2024, total revenue increased by about 2.0% to RMB 1.1155 billion compared to the same period last year, mainly driven by the newly built and expanded sewerage treatment facilities put into operation during the period. Due to the rise in operating costs and the completion of new projects, depreciation and amortization expenses increased, resulting in an overall gross margin of 48.8% for the period, slightly down by 1 percentage point from the same period last year, with an overall gross profit of RMB 0.5445 billion, which was basically flat compared to the same period last year. Benefiting from the decline in financing costs and cost-saving measures, the attributable net profit of the parent company for the period increased significantly by 32.8% compared to the same period last year, reaching RMB 0.1086 billion.
The actual sewerage treatment volume during the period increased by approximately 2.6% compared to the same period last year, reaching 0.6241 billion tons. The utilization rate of the sewerage treatment plants was 84%, maintaining a relatively high level. The net inflow of operating cash flow for the period was RMB 0.1609 billion, the highest level since 2017. In terms of financing activities, due to the general downward trend in domestic interest rates, the average borrowing rate for the period was 5.53%, a significant decrease of 0.53 percentage points from the same period last year, resulting in a reduction in financing costs for the period by about 6.3% to RMB 0.2742 billion. As of June 30, 2024, long-term borrowings accounted for 65.2% of total borrowings, and the long-to-short debt ratio was balanced and healthy. The current ratio at the end of the period was 1.19, the best level for the group in recent years.
As of June 30, 2024, the group had signed a total of 112 service franchise operation arrangements, including 106 sewerage treatment plants, 1 water supply plant, 3 sludge treatment plants, and 2 recycled water treatment plants. In the future, the group will further expand the urban water affairs treatment industry chain to enhance profitability and competitiveness.