Dongjiang Environmental (895) investor relations material

Executive summary

• Operating revenue for the first half of 2025 was RMB1,500.47 million, down 3.40% year-over-year, mainly due to a 27.61% drop in rare and precious metals recovery revenue and continued pressure in the hazardous waste sector.

• Net loss attributable to shareholders was RMB278.18 million, an 8.09% increase in loss compared to the same period last year, reflecting narrowing profit margins and intense industry competition.

• The company focused on technology, quality improvement, and strategic transformation, with new product sales surging 272% year-over-year and significant R&D achievements, including 15 new patent applications and 30 authorized patents.

• No fatal accidents or major environmental incidents occurred during the period, and the company maintained a strong safety and compliance record.

• The company expanded into auto parts remanufacturing and advanced new product launches such as nano-scale copper sulfate and nitrocellulose lacquer thinner.

Financial highlights

• Gross profit margin was 3.24%, down from 5.00% in the prior year, due to lower prices and higher discounts in core businesses.

• Selling expenses rose to RMB41.85 million (2.79% of revenue), while administrative expenses fell to RMB170.89 million (11.39% of revenue) due to cost controls.

• Finance costs remained stable at RMB93.87 million, and income tax expense decreased to RMB3.46 million.

• Net current assets improved to RMB-149.68 million from RMB-313.27 million at year-end 2024; cash and cash equivalents stood at RMB1,051.20 million.

• Gearing ratio increased to 65.31% from 63.20% at year-end 2024.

Outlook and guidance

• The company plans to deepen reforms, accelerate technological transformation, optimize its business structure, and dispose of low-efficiency assets.

• Focus will remain on expanding the resource recycling sector and developing new business growth drivers to improve profitability.