Huicheng Environmental to issue A-shares amid performance decline

Qingdao Huicheng Environmental Technology Group Co., Ltd. (Huicheng Environmental) plans to issue A-shares to specific investors, with a total fundraising of up to 850,000,000 yuan. The proceeds will be allocated to two projects in the Jieyang Grand South China Sea Petrochemical Industrial Zone: the General Industrial Solid Waste Treatment Phase I Project (350,000,000 yuan) and the Environmental Resource Comprehensive Utilization Phase I Project (250,000,000 yuan), with the remainder (250,000,000 yuan) supplementing working capital. These projects aim to enhance the company's resource utilization capabilities and expand its industrial waste treatment services.

The company's net profit attributable to shareholders declined by 9,591.32 yuan in 2024 to 4,259.97 yuan, and further to 502.04 yuan in H1 2025, primarily due to a decrease in gross profit and an increase in period expenses. This downturn is consistent with the broader industry trend, attributed to intense market competition and lower processing fees.

To address the performance decline and high capital expenditure, Huicheng Environmental is actively expanding its market presence, optimizing costs, and continuing to invest in R&D for new projects. These measures are expected to mitigate future financial risks and ensure long-term sustainable growth. The planned A-share issuance is also intended to improve the capital structure and reduce financial leverage.