Chengdu Xingrong Environment Co., Ltd. (000598)

Equity Research Report　|　Industry: Integrated Water and Environmental Services　|　Report Date: September 13, 2026　|　Data as of the September 11, 2026 close; shareholder structure data as of June 30, 2026, and the latest complete and verifiable major-fund-flow data as of September 4, 2026

This report was automatically compiled by AI based on publicly available information and is for reference only; it does not constitute investment advice.

1. Executive Summary

Xingrong Environment recorded revenue of RMB 4.388 billion in the first half of 2026, up 4.67% year on year; net profit attributable to the parent was RMB 1.021 billion, up 4.74%, while recurring net profit attributable to the parent rose 4.84% year on year, indicating moderate earnings growth. Net cash flow from operating activities was RMB 728 million during the same period, down 22.05% year on year, indicating that profit growth and cash collection improvement were not synchronized. As of September 11, 2026, the company’s closing share price was RMB 7.08, its market capitalization was approximately RMB 21.1 billion, its PE-TTM was approximately 10.3x, and its PB was approximately 1.05x, placing its valuation at the relatively low-to-mid end among water and environmental public utilities companies.

The company’s core businesses are water supply, wastewater treatment and environmental operations. In 2025, water supply and wastewater treatment revenue together accounted for approximately 78% of total revenue, while the overall gross margin increased from 38.47% in 2022 to 44.11% in 2025. In the first half of 2026, environmental business revenue was approximately RMB 933 million, up 17.29% year on year, with waste-to-energy revenue increasing 27.53%, mainly due to the contribution from the commissioning of Phase III of Chengdu Wanxing Environmental Power Plant. Traditional water supply and drainage businesses remained broadly stable, while water supply and drainage pipeline engineering continued to contract, further shifting the business mix toward long-term operating assets.

The company has franchise advantages in water supply and drainage operations in Chengdu and western China. It has secured more than 50 water and environmental franchise projects across nine provinces and autonomous regions, with most franchise terms ranging from 25 to 30 years. Future growth will mainly depend on the release of wastewater and reclaimed-water capacity, profit contribution from Wanxing Phase III, regional resource integration and improvements in operating efficiency, rather than simply on increases in water tariffs. The share price recently declined from an intraday high of RMB 7.47 on September 1 to RMB 7.08 on September 11, below the MA10, MA20 and multiple medium- and long-term moving averages. MACD remained in negative territory, indicating weak short-term technical conditions.

2. Company Overview

2.1 Basic Information

2.2 Main Businesses and Product Portfolio

• Tap water business: Covers water abstraction, purification, transmission through water-supply pipelines, tap-water sales and after-sales services. Operating models include BOO, BOT, TOT and entrusted operations. Projects are mainly located in Sichuan, Jiangsu and Hainan. In 2025, the scale of operating and under-construction water-supply projects was approximately 4.40 million tonnes/day. United Credit disclosed water-supply capacity of 4.2988 million tonnes/day and water-supply pipeline length of 16,466.53 kilometers, with production water volume of 1.356 billion tonnes and water sales volume of 1.183 billion tonnes in 2025. The figures differ because of inconsistent statistical definitions.
• Wastewater treatment and reclaimed-water utilization: Wastewater treatment covers urban domestic wastewater, rural domestic wastewater and industrial wastewater. Operating models include BOT, BOO, TOT and entrusted operations. In 2025, the scale of operating and under-construction wastewater treatment projects was approximately 5.00 million tonnes/day. United Credit disclosed actual wastewater treatment capacity of 4.5586 million tonnes/day, of which Chengdu’s central urban area and the High-tech Zone accounted for 2.84 million tonnes/day. Wastewater treatment volume was 1.442 billion tonnes in 2025, including 893 million tonnes in Chengdu. The scale of operating and under-construction reclaimed-water projects was approximately 1.30 million tonnes/day, mainly used for ecological replenishment, green-space irrigation and municipal miscellaneous purposes.
• Environmental protection and solid-waste treatment: Includes household-waste incineration power generation, landfill leachate treatment, sludge treatment, and food and kitchen-waste treatment. The respective operating and under-construction capacities were 12,000 tonnes/day, 8,430 tonnes/day, 3,116 tonnes/day and 1,950 tonnes/day.
• Engineering and technical services: Primarily focuses on municipal pipeline construction and provides design and construction, technical consulting, water-supply and drainage pipeline detection, equipment repair and manufacturing, and other services for water and environmental projects. In 2025, water-supply and drainage pipeline engineering revenue was RMB 530 million, accounting for 5.84% of total revenue and decreasing 45.97% year on year. Engineering has increasingly served as a supporting and extended business for the core water operations.
• Revenue structure: Revenue was RMB 9.068 billion in 2025, up 0.21% year on year. Revenue from tap-water supply, wastewater treatment services and environmental protection was RMB 3.115 billion, RMB 3.956 billion and RMB 1.637 billion, respectively, accounting for 34.35%, 43.62% and 18.06%, respectively; water supply and wastewater treatment together accounted for approximately 78% of revenue.
• Profit structure: Overall gross margin was 44.11% in 2025. Gross margins for tap-water production and sales, wastewater treatment services and environmental protection were 49.54%, 42.05% and 42.90%, respectively; the gross margin of waste-to-energy power generation was 45.64%.

2.3 Position in the Upstream and Downstream Value Chain and Cost-Profit Structure

Xingrong Environment is positioned toward the operating end of the midstream water and environmental protection value chain. It generates returns through government franchises, water-supply and drainage networks, regional operating experience and economies of scale. Its core assets have public-utility and capital-intensive characteristics. The company is neither a resource-based enterprise with pricing power over upstream resources nor a downstream enterprise relying on consumer-brand premiums.

• The tap-water business mainly purchases or consumes raw water, water-treatment chemicals, labor, depreciation, electricity and power. In 2025, raw materials, labor and depreciation accounted for 33.41%, 24.53% and 23.84%, respectively, of tap-water production and sales costs.
• Major wastewater treatment costs comprise fixed-asset depreciation, energy and power, labor and chemicals. In 2025, depreciation, energy and power, labor and chemicals accounted for 40.72%, 16.80%, 16.44% and 9.70%, respectively, of wastewater treatment costs.
• Water-supply and drainage pipeline engineering costs mainly comprise raw materials as well as labor and ancillary costs. In 2025, raw materials accounted for 59.93% of engineering costs, while labor and ancillary costs accounted for 27.54%.
• Procurement from the top five suppliers amounted to RMB 1.065 billion in 2025, accounting for 36.53% of total annual procurement. State Grid Sichuan Electric Power Company Chengdu Power Supply Company accounted for 12.66%, Chengdu Environment Group and its subsidiaries for 11.17%, and Sichuan Dujiangyan Water Conservancy Development Center for 9.16%. These figures are for 2025.
• The company has limited bargaining power over upstream raw water, basic electricity and certain water-treatment materials. Raw-water and electricity prices are generally affected by local public-utility pricing, government administration or public-utility procurement systems. Cost advantages mainly derive from water-source conditions, large-scale operations, regional franchises, centralized procurement and long-term asset-operation experience. The company has not disclosed complete data on its unit raw-water procurement cost advantage.
• Downstream customers mainly include residential users, non-residential users, government departments, power companies and other public institutions. The water-supply business charges end users directly, but tariff adjustments must go through government approval and relevant pricing procedures. As of the end of March 2026, the first-, second- and third-tier residential water tariffs in Chengdu’s central urban area were RMB 3.03/m³, RMB 3.90/m³ and RMB 6.51/m³, respectively, while the non-residential domestic water tariff was RMB 4.43/m³. End-user water tariffs in Chengdu’s central urban area have not changed since 2017.
• Wastewater treatment services are mainly charged to relevant government departments based on franchise agreements, with settlement prices determined and approved by government departments according to the agreements. Downstream counterparties are essentially governments and government-authorized entities. Their credit quality is generally higher than that of ordinary commercial customers, but collections are affected by local fiscal conditions, the pace of fiscal payments and the progress of local debt resolution.
• Sales to the top five customers amounted to RMB 4.172 billion in 2025, accounting for 46.02% of total annual sales. Chengdu Municipal Finance Bureau accounted for 31.96%, State Grid Sichuan Electric Power Company for 5.98%, Chengdu High-tech Industrial Development Zone Ecology and Environment and Urban Management Bureau for 3.44%, Chengdu Pidu District Water Affairs Bureau for 2.38%, and Chengdu Municipal Commission of Urban Management for 2.26%. These concentration figures are for 2025. The research notes did not provide cross-verifiable data for other years; the latest annual report should be regarded as authoritative.
• The largest customer was Chengdu Municipal Finance Bureau, with sales of RMB 2.898 billion, accounting for 31.96% of total sales in 2025. The relatively high customer concentration reflects the characteristics of Chengdu’s regional franchises and government-purchased services, while also indicating some dependence on local fiscal settlement and government payment arrangements.
• Industry charges and profitability are not fully market-oriented. Water tariffs are subject to government approval, and wastewater treatment service fees depend on franchise agreements and government approval. The company competes mainly in project acquisition, financing costs, operating efficiency, technical capabilities and local resource integration, rather than through consumer-brand competition.
• The accounts receivable turnover ratio was 2.6494x in 2025, with accounts receivable turnover days of 135.88 days. It took approximately 4.5 months on average from revenue recognition to cash collection. United Credit’s compilation of public information showed year-end 2025 accounts receivable of approximately RMB 3.495 billion, equivalent to approximately 38.5% of 2025 revenue of RMB 9.068 billion. This RMB 3.495 billion figure was compiled by United Credit and was not fully cross-checked against the corresponding balance-sheet line item in the annual-report web text reviewed for this report. Formal citation should follow the notes to the financial statements in the company’s 2025 annual report. These figures indicate that wastewater treatment, environmental projects and engineering businesses continue to tie up significant working capital, with relatively long settlement cycles for government and local-platform customers.
• The top five suppliers accounted for 36.53% of procurement, while the top five customers accounted for 46.02% of sales; both figures are for 2025. The company is positioned in a value chain where upstream costs are relatively rigid and downstream charges are affected by government pricing and fiscal settlement. Customer-concentration data comes from relevant disclosures in the 2025 annual report. The research notes did not provide data for other years for cross-checking; the latest annual report should be regarded as authoritative.

The company is positioned toward the operating end of the midstream water and environmental protection value chain and is a capital-intensive, franchise-based public-utility operator. Its profits mainly come from long-term operating assets rather than upstream resource pricing power or downstream brand premiums. The main avenues for further profit improvement are the release of wastewater and reclaimed-water capacity, integration of water-supply and drainage resources in Chengdu, a higher proportion of operating assets following the contraction of engineering activities, large-scale operations, cost control and improved collections, rather than simply relying on market-oriented price increases.

3. Financial Data and Valuation Analysis

3.1 Recent Operating Performance

Recurring net profit attributable to the parent was RMB 1.002 billion in the first half of 2026, up 4.84% year on year; basic EPS was RMB 0.3426, up 4.77%; weighted average ROE was 5.07%, down 0.16 percentage points year on year. Net cash flow from operating activities was RMB 728 million in the first half of 2026, down 22.05% year on year. As of the end of June 2026, total assets were RMB 52.881 billion, while net assets attributable to shareholders of the listed company were RMB 20.044 billion, up 1.63% from the end of 2025. Net profit attributable to the parent was RMB 975 million in the first half of 2025.

The company’s performance remained stable but growth was modest. Environmental business revenue was approximately RMB 933 million in the first half of 2026, up 17.29% year on year, while waste-to-energy revenue was approximately RMB 468 million, up 27.53% year on year, mainly due to the contribution from the commissioning of Phase III of Chengdu Wanxing Environmental Power Plant. Traditional tap-water and wastewater treatment businesses were broadly stable, while water-supply and drainage pipeline engineering continued to contract. Attention should be paid to the year-on-year decline in operating cash flow, as well as project collections, credit impairment, depreciation of capital-intensive projects and financing-expense pressure.

3.2 Earnings Forecasts

Forecast data comes from public research-report summaries and earnings-forecast pages published by Huatai Securities, Huayuan Securities, Soochow Securities and Founder Securities, among others. These figures represent forecast ranges or representative forecasts from public institutions and should not be treated as precisely equivalent to the strict multi-institution arithmetic-consensus estimates of terminals such as Wind. Differences in forecasts mainly reflect different assumptions regarding project commissioning schedules, water-supply and drainage pipeline engineering revenue, credit impairment losses and the earnings ramp-up of solid-waste projects.

3.3 Valuation and Institutional Ratings

As of September 11, 2026, Xingrong Environment’s closing share price was RMB 7.08, down 0.42% on the day. Total shares outstanding were approximately 2.984 billion, and total market capitalization was approximately RMB 21.1 billion. Based on the 2025 annual report and the 2026 interim report, trailing-12-month net profit attributable to the parent was approximately RMB 2.051 billion, implying a static PE (TTM) of approximately 10.3x. As of the end of June 2026, net assets attributable to shareholders of the listed company were RMB 20.044 billion, equivalent to approximately RMB 6.72 per share. Based on the RMB 7.08 closing price, PB was approximately 1.05x. Based on Huayuan Securities’ 2026–2028 EPS forecasts of RMB 0.71, RMB 0.76 and RMB 0.82, corresponding forward PE ratios are approximately 10.0x, 9.3x and 8.6x; based on Huatai Securities’ EPS forecasts of RMB 0.73, RMB 0.80 and RMB 0.87, corresponding forward PE ratios are approximately 9.7x, 8.9x and 8.1x. The current valuation is generally in the low-to-mid range for water and environmental public utilities companies. Institutional target prices are mainly concentrated between RMB 8.12 and RMB 8.18, implying potential upside of approximately 14.7% to 15.5% from the RMB 7.08 closing price. Valuation support mainly comes from the stability of water operations, the commissioning of Wanxing Phase III, lower capital expenditure and a higher dividend payout ratio. Key uncertainties include limited growth, declining operating cash flow, project collection and credit-impairment risks, and depreciation and financing-expense pressure following the commissioning of capital-intensive projects. Public information is insufficient to confirm a unified and strictly defined multi-institution consensus estimate; earnings forecasts should therefore be identified as public-institution forecast ranges.

4. Recent News and Announcements

4.1 Moderate Growth in First-Half 2026 Results

The company disclosed its 2026 interim report on August 26, 2026. Revenue was RMB 4.388 billion in the first half of 2026, up 4.67% year on year; net profit attributable to shareholders of the listed company was RMB 1.021 billion, up 4.74% year on year; recurring net profit attributable to the parent was RMB 1.002 billion, up 4.84% year on year; net cash flow from operating activities was RMB 728 million, down 22.05% year on year; and basic EPS was RMB 0.3426. The interim profit-distribution plan proposed no cash dividend, no bonus shares and no capitalization of capital reserve into share capital.

4.2 No New 2026 Earnings Guidance Identified to Date

As of September 12, 2026, no new earnings guidance, earnings flash or earnings revision announcement for the first three quarters or full year of 2026 had been identified. The latest formally confirmed earnings document is the 2026 interim report, although delays in the announcement system or search-engine indexing cannot be ruled out.

4.3 Xinhuan Green Holdings’ Stake Increased to 9.01%

The company disclosed on August 27, 2026 that Xinhuan Green Holdings (Beijing) Co., Ltd. acquired 26,673,707 company shares, representing 0.89% of total shares outstanding, through centralized bidding on the Shenzhen Stock Exchange between July 24 and August 25, 2026. Following the purchases, its holdings increased to 268,895,203 shares and its ownership rose from 8.12% to 9.01%, triggering the 1-percentage-point disclosure threshold. The purchases were funded with its own capital, and there were no persons acting in concert.

4.4 Xinhuan Green Holdings Has Completed the Minimum of Its Original Purchase Plan, but the Plan Has Not Ended

According to the July 10, 2026 announcement, Xinhuan Green Holdings originally planned to continue acquiring no fewer than 70 million shares within six months of the announcement date, without setting a fixed price or price range. As of August 25, it had cumulatively acquired 81,990,108 shares between July 10 and August 25, exceeding the minimum purchase target of 70 million shares. The announcement stated that the purchase plan had not been completed as of the disclosure date and that further purchases could still be made depending on market conditions.

4.5 The Purchases Have Not Yet Changed the Company’s Control Structure

Xinhuan Green Holdings continued increasing its stake from June 29 to August 25, 2026, raising its ownership from 6.12% to 9.01%. The company’s controlling shareholder, Chengdu Environment Investment Group Co., Ltd., holds approximately 42.21%. Therefore, as of the date covered by the research notes, Xinhuan Green Holdings’ purchases had not changed the company’s controlling shareholder or actual controller. The subsequent purchase activity and final ownership percentage remain uncertain.

4.6 Interim-Report Earnings Briefing Held on September 11, 2026

The company disclosed a relevant announcement on September 4, 2026, stating that it would participate online in the 2026 Investor Online Collective Reception Day for Sichuan and the interim-report earnings briefing from 15:00 to 17:00 on September 11, 2026, via Panorama Roadshow. Participants included director and general manager Rao Yi, board secretary Hu Han, financial officer Song Xinglai and independent director Pan Xilong. The company disclosed an investor-relations activity record on September 12, 2026, explicitly stating that the event did not involve material information requiring disclosure.

4.7 Board Re-Election Postponed

The term of the 10th Board of Directors was originally scheduled to expire on August 25, 2026. As preparations for the election remained ongoing, the company decided to appropriately postpone the transition. The terms of the board’s special committees and senior management were correspondingly extended, and they will continue performing their duties until the transition is completed. The company stated that the postponement would not affect normal operations. As of September 12, 2026, no new announcement regarding the list of director candidates, the transition date or the election results had been identified.

4.8 Wanxing Environmental Power Plant Phase III Has Achieved Stable Grid Connection; Waste-Treatment Service Fee Is Still Being Determined

The company disclosed in its 2026 interim report that Phase III of Chengdu Wanxing Environmental Power Plant had achieved stable grid-connected power generation, while the determination of the waste-treatment service fee was still progressing. In investor-interaction responses between July and September 2026, the company repeatedly stated that the relevant service fee was still under determination. As of September 12, 2026, no announcement disclosing the final waste-treatment service fee or formal implementation plan had been identified. The project has a designed treatment capacity of 5,100 tonnes/day. The timing of profit recognition and the degree of profit elasticity remain uncertain.

4.9 Partial Repurchase and Cancellation of Restricted Shares Completed

The company disclosed on June 30, 2026 an announcement regarding the repurchase and cancellation of certain restricted shares, reduction of registered capital and amendment of the Articles of Association. The proposal was approved by the company’s second extraordinary shareholders’ meeting of 2026 on July 15. As 13 participants in the 2022 restricted-share incentive plan no longer qualified for incentives due to organizational transfers, resignation or voluntary departure, the company planned to repurchase and cancel a total of 165,000 restricted shares held by them, representing 0.0055% of total shares outstanding before the repurchase and cancellation. Following completion, total shares outstanding were expected to change from 2,984,008,721 to 2,983,843,721. This was a restricted-share repurchase and cancellation, not a share repurchase in the secondary market. As of September 12, 2026, no new large-scale share-repurchase plan had been identified.

4.10 Wanxing Environmental Power Plant Phase III and Internal Asset-Structure Adjustments

During the first half of 2026, the company adjusted the equity structure of certain subsidiaries. It transferred 100% of Chengdu Environment Water Construction Co., Ltd. to Chengdu Water Supply Co., Ltd. through a non-public agreement transfer. Following completion of the equity transfer, it gratuitously transferred 100% of Chengdu Water Underground Pipeline Detection Co., Ltd. and Chengdu Water Supply Engineering Design Co., Ltd. to Chengdu Water Supply Co., Ltd. This was an internal group equity-structure adjustment intended to focus on the core water and environmental businesses, optimize resource allocation and improve management synergies, rather than an external major acquisition or material asset restructuring.

4.11 New Related-Party Transaction Amount Provisionally Set at RMB 184.7971 Million

In June 2026, the company disclosed a new related-party transaction arising from public tendering, involving construction services for advanced waste-incineration treatment and resource-utilization projects. The provisional transaction amount was RMB 184.7971 million, including tax. The transaction resulted from public tendering and related to the company’s daily operations and project construction. The announcement did not indicate that the transaction itself constituted a material asset restructuring.

4.12 No Regulatory Investigation or Material Inquiry Identified to Date

As of September 12, 2026, no latest announcement had been identified stating that Xingrong Environment had been subject to a regulatory investigation, administrative penalty, public censure or material inquiry by regulatory authorities. In response to questions regarding possible water-tariff adjustments in Chengdu, the company stated on September 9, 2026 that it had not received relevant information. Claims that a tariff-adjustment procedure would begin by the end of 2026 and that a hearing would be held in 2027 cannot currently be treated as confirmed policy information from the company.

5. Share-Price Performance and Technical Analysis

5.1 Price Overview

5.2 Technical Indicators

Xingrong Environment reached an intraday phase high of RMB 7.47 on September 1, 2026, before continuing to retreat and closing at RMB 7.08 on September 11. The price was below MA10, MA20, MA50, MA100 and MA200, and roughly in line with MA5. MACD was -0.050 with a bearish technical signal, while RSI14 was 38.219, indicating short-term weakness but not extreme oversold conditions. The share price was close to the lower edge of the Bollinger Band estimated from the closing-price series. RMB 7.02–7.06 was the first recent support zone, while RMB 7.10–7.15 was the short-term resistance zone. Turnover value and turnover rate were generally low to moderate. The recent decline in volume coincided with price weakness, and no clear high-volume bottoming signal had emerged. Shareholder-concentration data were as of June 30, 2026. The top ten tradable shareholders and institutional ownership ratios were high, but institutional holdings were mainly classified as “other institutions,” with public-fund ownership low and the data subject to quarterly lag.

5.3 Short-Term Outlook (Next Week, Scenario Analysis for Reference Only)

⚠️ Risk warning: The following content is a subjective scenario analysis based on the September 11, 2026 closing data and historical technical indicators. It does not constitute investment advice or a definitive forecast of future share prices.

① Key Technical Levels

② Scenarios for the Coming Week (Subjective Weights, Not Statistical Probabilities)

• Range-bound consolidation (relatively higher weight, approximately 60%; this is a subjective assessment based on current technical conditions and fund flows, not a statistical probability): Price range of RMB 7.02–7.15. Triggering conditions include holding the RMB 7.02–7.06 support zone, turnover value remaining within the recent normal range of approximately RMB 90 million to RMB 150 million, no clear negative news, and selling pressure near RMB 7.10–7.15 not being overcome on high volume. With RSI14 at approximately 38.2 and the share price near the estimated lower Bollinger Band, the price may fluctuate repeatedly between RMB 7.00 and RMB 7.15 if major-fund outflows do not continue to expand.
• Weak downward move (medium weight; this is a subjective assessment based on current technical conditions and fund flows, not a statistical probability): Price range of RMB 6.90–7.02. Triggering conditions include a confirmed closing break below RMB 7.02, a significant increase in daily turnover value to more than RMB 160 million–RMB 200 million accompanied by a lower close, continued net outflows of major funds, or simultaneous weakening in risk appetite toward the environmental, public-utility and broader market sectors. If support at RMB 7.02 fails, the market may test the RMB 6.90–6.98 area. It will be important to distinguish a high-volume decline from a simple intraday break below support.
• Stronger rebound (low weight; this is a subjective assessment based on current technical conditions and fund flows, not a statistical probability): Price range of RMB 7.15–7.24, with a strong move potentially testing around RMB 7.30. Triggering conditions include the share price regaining RMB 7.15 and confirming this through consecutive closes, daily turnover value consistently expanding to approximately RMB 180 million–RMB 200 million or more, major-fund flows shifting from continued net outflows to continued net inflows, simultaneous strength in the water and environmental, public-utility or state-owned-enterprise reform sectors, and the absence of a clear intraday reversal after breaking through RMB 7.20–7.24.

③ Fund-Flow and Liquidity Background

Xingrong Environment has a total market capitalization of approximately RMB 21.1 billion to RMB 21.2 billion. Recent turnover has mostly been around 0.4% to 0.8%, while turnover value has generally been approximately RMB 90 million to RMB 160 million, indicating that the stock is not in a high-turnover, highly active state. Low turnover means limited short-term trading activity, and price sensitivity to individual fund flows and sector sentiment should be assessed together with changes in turnover value. Data as of June 30, 2026 showed that the top ten tradable shareholders held 67.08% of tradable shares and institutions held 66.95%, but “other institutions” accounted for 63.38%, while funds accounted for only approximately 2.97%. The stock therefore cannot simply be viewed as being dominated by public funds. The shareholder-structure data are subject to quarterly lag and may have changed due to position adjustments, purchases or sales. Regarding major funds, the latest complete and verifiable data are as of September 4, 2026, when net outflows were approximately RMB 15.3058 million; reliable net major-fund-flow data for September 11 had not yet been cross-checked.

A checkable volume-confirmation signal would be a break above RMB 7.15 accompanied by daily turnover value of approximately RMB 180 million or more and sustained activity at that level, which could indicate that the rebound had volume confirmation. If the price falls below RMB 7.02 while turnover value expands materially to approximately RMB 160 million–RMB 200 million or more, investors should be alert to support failure and a potential move toward RMB 6.90–6.98.

④ Points to Monitor (Observation Framework Only, Not Trading Instructions)

• Observe whether the RMB 7.02–7.06 first support zone shows low-volume stabilization or other signs of bottoming; this is an observation framework, not a trading instruction.
• Observe whether the RMB 7.10–7.15 short-term resistance zone can be regained and held, and whether turnover value expands during the breakout; this is an observation framework, not a trading instruction.
• Observe whether the RMB 7.20–7.24 medium-term resistance zone can be effectively broken, and whether an intraday reversal occurs during the breakout; this is an observation framework, not a trading instruction.
• Observe whether daily turnover value consistently reaches approximately RMB 180 million or more, and whether it expands to approximately RMB 160 million–RMB 200 million or more when the price falls below RMB 7.02; this is an observation framework, not a trading instruction.

The above scenario analysis is based on the September 11, 2026 closing data and calculations using historical prices and technical indicators. Short-term share prices will also be affected by news, fund flows, the broader market environment and other factors. Technical indicators themselves have lagging effects and limitations. This analysis does not guarantee future actual performance and does not constitute a buy or sell recommendation. Investors should make independent judgments based on the latest market information and bear investment risks themselves.

6. Industry Landscape and Competitor Analysis

6.1 Industry Overview

The water and environmental protection industry has public-utility, regional-monopoly and capital-intensive characteristics. Water-supply and wastewater treatment projects generally require substantial capital investment and have long payback periods, while operating rights are often granted through government franchises. The industry is shifting from single-point treatment and incremental expansion toward systemic coordination, optimization of existing assets and resource recycling. Private-capital participation is increasing, competition is intensifying, low-price competition is becoming more common and industry concentration is gradually rising.

6.2 Competitive Landscape

• Competition in the industry is mainly reflected in project acquisition, capital strength, financing costs, operating efficiency, technical capabilities and local resource-integration capabilities, rather than simple product-brand competition.
• Based on total designed wastewater treatment capacity, 2024 industry research classified Beijing Enterprises Water Group, Capital Environment and OriginWater as the first tier, each with more than 10 million tonnes/day; CECEP Guozhen, Chongqing Water, Tsinghua Tongfang Water and Xingrong Environment were classified as the second tier, with approximately 4 million to 10 million tonnes/day. This classification comes from 2024 industry research and should not be viewed directly as the latest ranking for 2026.
• China’s municipal wastewater marketization rate was approximately 35% in 2022, while the CR10 of the wastewater treatment market was approximately 53%. These figures are as of 2022 and should not be viewed as the latest 2026 market shares. They indicate that many local and regional water companies remain in the industry, while leading companies are increasing concentration through mergers and acquisitions, franchises and cross-regional expansion.
• Xingrong Environment has secured more than 50 water and environmental franchise projects across nine provinces and autonomous regions—Sichuan, Gansu, Ningxia, Shaanxi, Hainan, Jiangsu, Hebei, Shandong and Tibet—with most franchise terms ranging from 25 to 30 years, creating regional networks and long-term operating barriers.

6.3 Major Competitors

Compared with Beijing Enterprises Water Group and Capital Environment, Xingrong Environment has a smaller national footprint and narrower integrated environmental-service coverage, but it has strong water-supply and drainage franchise advantages in Chengdu and Sichuan. Like Chongqing Water and Hongcheng Environment, it is a local state-owned and regional public-utility operator; the key differences lie in its regional base and business mix. Compared with OriginWater, Xingrong Environment is more focused on capital-intensive operations and public-utility cash flow, while OriginWater is more focused on technology and engineering solutions.

7. Risk Factors

• Local fiscal settlement and customer-concentration risk: Sales to the top five customers accounted for 46.02% in 2025, with Chengdu Municipal Finance Bureau accounting for 31.96%; wastewater treatment service fees are mainly approved by government departments under franchise agreements. Accounts receivable turnover days were 135.88 days, and changes in local fiscal payment schedules or debt-resolution progress could affect collections and cash flow.
• Risk of declining operating cash flow: Net cash flow from operating activities was RMB 728 million in the first half of 2026, down 22.05% year on year. The company remains engaged in capital-intensive water-supply, wastewater treatment and solid-waste operations. If revenue recognition and cash collection continue to diverge, working-capital pressure could increase.
• Uncertainty regarding profit realization at Wanxing Environmental Power Plant Phase III: The project has achieved stable grid-connected power generation, but determination of the waste-treatment service fee remains ongoing. As of September 12, 2026, no final approved price or formal implementation plan had been disclosed, creating uncertainty regarding the timing of revenue recognition and profit elasticity.
• Cost and margin pressure: Depreciation accounted for 40.72% of wastewater treatment costs and energy and power for 16.80%. Raw materials and labor together accounted for a relatively high proportion of tap-water production and sales costs. The company has limited bargaining power over raw water, electricity and certain water-treatment materials. If costs rise while water tariffs and wastewater treatment service fees adjust with a lag, profitability could be compressed.
• Constraints on water-tariff adjustments: End-user water tariffs in Chengdu’s central urban area have not changed since 2017. Water tariffs require government approval and relevant pricing procedures, so the company cannot rely solely on market-based price increases to offset cost, depreciation or financing-expense pressure.
• Capital-intensive and financing-expense pressure: As of the end of June 2026, the company had total assets of RMB 52.881 billion. Water-supply, wastewater treatment and solid-waste projects have long payback periods. Newly commissioned projects may increase depreciation and financing expenses. If capacity release or fee approval falls short of expectations, asset returns could be affected.
• Governance and shareholder-structure change risk: Following the expiration of the 10th Board of Directors’ term, the board transition was postponed. As of September 12, 2026, no new director-candidate list or transition result had been disclosed. Meanwhile, Xinhuan Green Holdings’ stake had risen to 9.01%, and its purchase plan had not yet been completed. Subsequent changes in its holdings could create uncertainty regarding the shareholder structure and governance arrangements.
• Short-term market and technical risk: The share price declined from the intraday high of RMB 7.47 on September 1, 2026 to RMB 7.08 on September 11. The closing price was below MA10, MA20, MA50, MA100 and MA200, MACD was negative, and recent major-fund flows included net outflows while trading volume declined. If support near RMB 7.02 fails, short-term price volatility could intensify.

8. Conclusion and Outlook

The company’s fundamentals are characterized by “stable operations, moderate growth and an improving earnings mix.” Water supply and wastewater treatment provide a relatively stable operating base. The contraction of engineering activities and capacity release from operating projects have driven continued gross-margin improvement. Wanxing Environmental Power Plant Phase III has achieved stable grid connection. If the waste-treatment service fee is approved in due course, environmental business revenue and profit contributions could be released further. Public-institution forecasts for 2026–2028 net profit attributable to the parent are approximately RMB 2.105 billion–RMB 2.188 billion, RMB 2.267 billion–RMB 2.395 billion and RMB 2.426 billion–RMB 2.589 billion, respectively. Differences in forecasts depend on assumptions regarding project commissioning, service-fee approval, collections and credit impairment.

The company’s medium- and long-term value is supported by its regional franchise network, capital-intensive operating barriers and relatively high gross margins. However, growth remains constrained by public-utility pricing mechanisms, project construction and depreciation and financing expenses, local fiscal settlement and cash-collection efficiency. The current share price is in a correction phase following its early-September rise. RMB 7.02–7.06 is a reference range for recent technical support, while RMB 7.10–7.15 and RMB 7.20–7.24 represent short- and medium-term resistance zones, respectively. Future fundamental assessment should continue to monitor operating cash flow, project collections, the approval of the Wanxing Phase III service fee and the earnings ramp-up of the environmental business.

Data Sources

• Chengdu Xingrong Environment Co., Ltd. 2025 Annual Report Summary
• https://pdf.dfcfw.com/pdf/H2_AN202604271821633447_1.pdf
• Xingrong Environment (000598)_Company Announcements_Xingrong Environment: 2026 Tracking Rating Report_Sina Finance_Sina.com
• Xingrong Environment (000598) Financial Indicators_Sina Finance_Sina.com
• Chengdu Xingrong Environment Co., Ltd.
• Chengdu Xingrong Environment Co., Ltd.
• Xingrong Environment (000598)_Company Announcements_Xingrong Environment: 2024 Annual Report_Sina Finance_Sina.com
• 〖Industry Deep Dive〗Insights 2024: Competitive Landscape and Market Share of China’s Wastewater Treatment Industry (Including Market Concentration and Company Strategies)_Industry Research Report - Qianzhan
• Beijing Capital Eco-Environment Protection Group Co., Ltd. 2025 Annual Report
• Chongqing Water Group Co., Ltd. 2025 Annual Report
• Jiangxi Hongcheng Environment Co., Ltd. 2025 Annual Report
• Xingrong Environment (000598)_Company Announcements_Xingrong Environment: 2026 Interim Report Summary_Sina Finance_Sina.com
• Xingrong Environment (000598)_Company Announcements_Xingrong Environment: 2026 Interim Report_Sina Finance_Sina.com
• Xingrong Environment (000598) Earnings Forecast_F10_Tonghuashun Financial Services
• Company Announcements_Xingrong Environment: 2025 Annual Report Summary_Sina Finance_Sina.com
• Securities Code: 000598
• Xingrong Environment (000598) Earnings Forecast_F10_Tonghuashun Financial Services
• Earnings Forecast
• https://pdf.dfcfw.com/pdf/H3_AP202606061823330935_1.pdf?1780824136000.pdf=
• Xingrong Environment (000598) Stock Forecast and Analyst Ratings - Futu NiuNiu
• Xingrong Environment (000598) Historical Stock Data: Historical Quotes, Prices and Charts_Investing.com
• Xingrong Environment (000598)_Company Announcements_Xingrong Environment: 2026 Interim Report Summary_Sina Finance_Sina.com
• Xingrong Environment (000598)_Company Announcements_Xingrong Environment: Announcement on Participation in the 2026 Investor Online Collective Reception Day for Sichuan and Interim-Report Earnings Briefing_Sina Finance_Sina.com
• Company Announcements_Xingrong Environment: September 11, 2026 Investor-Relations Activity Record_Sina Finance_Sina.com
• Xingrong Environment (000598) Company Announcements_Sina Finance_Sina.com
• Xingrong Environment (000598)_Company Announcements_Xingrong Environment: Announcement on a Shareholding Change by a Shareholder Holding More Than 5% of Shares Reaching a 1-Percentage-Point Threshold_Sina Finance_Sina.com
• https://static.cninfo.com.cn/finalpage/2026-07-10/1225417182.PDF
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• Xiao Jingji—Xingrong Environment
• Securities Abbreviation: Xingrong Environment; Securities Code: 000598; Chengdu Xingrong Environment Co., Ltd.
• Xingrong Environment (000598)_Company Announcements_Xingrong Environment: Indicative Announcement on Postponement of Board Re-Election_Sina Finance_Sina.com
• Securities Code: 000598  Securities Abbreviation: Xingrong Environment  Announcement No.: 2026-20
• Securities Code: 000598  Securities Abbreviation: Xingrong Environment  Announcement No.: 2026-23
• Xingrong Environment (000598) Latest Developments_F10_Tonghuashun Financial Services
• Xingrong Environment (000598) PE | Valuation | Fundamentals - Lixinger
• Xingrong Environment (000598) Historical Stock Data: Historical Quotes, Prices and Charts_Investing.com
• Chengdu Xingrong Investment Co Ltd Stock Technical Analysis (000598)
• Chengdu Xingrong Investment Co Ltd Stock Technical Analysis (000598) - Investing.com
• Xingrong Environment (000598) Stock Analysis_Niucha Diagnosis_Tonghuashun Finance
• Xingrong Environment (000598) Fund Flows_Individual Stock Quotes_Tonghuashun Finance
• Single-Stock Research
• Xingrong Environment (000598.SZ) Trading Essentials—PC_HSF10 Data

This report was automatically searched, compiled and generated by AI based on publicly available information. Information is current as of the September 11, 2026 close; shareholder structure data are as of June 30, 2026, and the latest complete and verifiable major-fund-flow data are as of September 4, 2026. Timing differences may exist. Specific data should be based on the company’s formal announcements and authoritative data terminals. This report is for information compilation and research reference only and does not constitute investment advice. Investors should make independent judgments and bear investment risks themselves.