Insight into Annual Reports | Extracting 700 million in net profit from a garbage dump, the "offensive and defensive strategy" of Junxin Shares

Ask AI · Junxin Shares’ Acquisition of Renhe Environment: How Does It Boost Net Profit to a New High?

“You see, with this grab bucket, you get 10-12 tons of household waste. The subsequent processed waste from this grab bucket can generate enough electricity to meet a family’s annual electricity needs.” At the Heimfeng Solid Waste Treatment Plant in Changsha, staff from Hunan Junxin Environmental Protection Co., Ltd. (referred to as “Junxin Shares,” 301109.SZ) explained to reporters participating in a survey organized by the China Banking Association.

Junxin Shares’ solid waste treatment site. Photo by Beijing News Shell Finance Reporter Huang Xinyu

On the evening of March 31, 2026, the company disclosed its full-year 2025 performance. Wind data shows its net profit attributable to parent company was 716.6 million yuan, reaching a five-year high, with a year-on-year increase of 33.62%. Operating cash flow net increase was 74.98% year-on-year, and the asset-liability ratio dropped to 34.53%, the lowest in five years.

Amidst intensified homogeneous competition in the solid waste treatment industry, Junxin Shares has chosen a “high performance + high dividend stability + overseas + green electricity” simultaneous development path. This road ahead offers broad market space but also contains unknown reefs. The year 2026 will be a key year to test Junxin Shares’ strategic choices.

“守” (“Guard”): Solid Waste Treatment Fundamentals Stable, Cash Flow Abundant

Household waste — the “arsenic” to some, the “honey” to others — this phrase is perfectly fitting for Junxin Shares. Its official website shows that Junxin Shares has long been committed to solid waste, kitchen waste, municipal sludge, leachate, fly ash, and green energy businesses, covering Hunan Province and countries along the “Belt and Road.” As of the close on April 1, the company’s total market value is about 12.6 billion yuan.

The annual report indicates that within Hunan Province, Junxin Shares fully covers the treatment of household waste, urban kitchen waste, and most municipal sludge in all six districts and one county of Changsha, and holds market shares in Liuyang City for all household waste and urban kitchen waste, as well as in Ningxiang City for urban kitchen waste and Pingjiang County for all household waste. Currently, the company’s household waste transfer capacity in Hunan is 10,000 tons per day, waste incineration capacity is 9,600 tons per day, and kitchen waste processing capacity is 1,200 tons per day.

From a financial fundamentals perspective, this company’s 2025 performance is impressive.

Data shows that the company achieved an operating revenue of 2.75B yuan for the year, a 13.05% increase year-on-year; net profit attributable to parent was 717 million yuan, a 33.62% increase, hitting a five-year high.

According to Wind data, charted by Beijing News Shell Finance Reporter Huang Xinyu

In terms of operational efficiency, Junxin Shares’ ability to convert “waste” into “electricity” has also improved. In 2025, the company’s waste incineration electricity generation exceeded 1.84B kWh, a 24.8% increase; electricity generated per ton of waste reached 486.26 kWh, up 5.72%.

According to management, the reasons behind the 2025 performance growth include several factors, with the foremost being the acquisition of a 63% stake in Renhe Environment held by the relevant transaction parties. Renhe Environment has now been officially consolidated into the company’s financial statements, which has contributed to growth in the company’s asset scale, revenue, and profit.

Meanwhile, core operational indicators such as household waste treatment volume and electricity generation per ton of waste from the company’s waste-to-energy projects have steadily increased. The commissioning of new projects in Liuyang and Pingjiang has gradually released capacity, further supporting performance.

Alongside performance growth, Junxin Shares’ shareholder return efforts in 2025 are also “big moves.” According to the 2025 annual report, the company plans to distribute a cash dividend of 6.53 yuan (including tax) per 10 shares, totaling 507 million yuan. The company has previously announced a long-term dividend plan, promising that annual cash dividends will not be less than 50% of net profit attributable to the parent, and a share repurchase plan of 200-300 million yuan is also underway.

“攻” (“Attack”): When Will the “Green Computing Power” Second Growth Curve in Central Asia Take Shape?

However, the other side of the coin also warrants attention. The high dividend payout is set against the backdrop of Junxin Shares’ current expansion into overseas markets.

The 2025 annual report shows that in “Belt and Road” countries (especially Central Asia), Junxin Shares focuses on household waste incineration as its core business. It has signed four waste (solid waste) disposal and power generation projects, with a total capacity of 9,000 tons per day, covering nearly all of Kyrgyzstan’s solid waste treatment operations, gradually forming a point-to-surface business layout in Central Asia.

According to Frost & Sullivan, as of June 30, 2025, based on total planned scale (under construction + planned), Junxin Shares ranks first among solid waste treatment companies in Central Asia.

But it should not be overlooked that Junxin Shares’ overseas business is still in the “investment phase.” Despite the sizable signed projects, recent annual reports also show that its non-Hunan (including overseas) operations are still in early stages, contributing minimally to overall revenue. Local operational challenges and exchange rate fluctuations are obstacles the company must overcome. How to turn “contract orders” into “real cash” remains a question for management in 2026.

Based on historical annual report data of Junxin Shares, charted by Beijing News Shell Finance Reporter Huang Xinyu (Note: Before 2024, Junxin Shares’ business was mainly concentrated in Changsha and Yueyang in Hunan Province)

Additionally, Junxin Shares has begun to cross into “green computing power” supply.

In June 2025, Junxin Shares reached a strategic partnership with Changsha Digital Group to explore a model of “waste incineration power + green computing power center.” Against the backdrop of the accelerated “East Data West Computing” project, Junxin Shares uses stable green electricity from waste power generation to support intelligent computing centers.

By the end of 2025, Qin Shishun, director, secretary of the board, and deputy general manager of Junxin Shares, stated in an interview with Beijing News “Looking at 2026” that the company aims to build a “three-in-one” integrated business model of “waste incineration power (green power center) + steam heating (heating center) + green power computing services (computing power center)” based on its own advantages, creating new growth points and achieving high-quality development.

If this project is successfully implemented, it will undoubtedly expand the valuation logic of traditional environmental protection companies. However, the latest developments of this new business model are not further disclosed in the 2025 annual report. From concept to actual benefits, Junxin Shares may still have a road ahead.

Beijing News Shell Finance Reporter Huang Xinyu

Editor: Yue Caizhou

Proofreader: Mu Xiangtong