CECEP Guozhen has reported 1H26 revenue of RMB1,731mn (+5.69% YoY), attributable NP of RMB202mn (+11.82% YoY), and recurring attributable NP of RMB200mn (+11.94% YoY). For 2Q26, revenue was RMB925mn (-1.25% YoY, +14.74% QoQ), and attributable NP was RMB112mn (-0.69% YoY, +24.81% QoQ). The company's water operations business remains stable, and coupled with ongoing organizational structure optimization and cost control efforts, we expect profitability to improve. Maintain OVERWEIGHT.
1H26 water operation business revenue +8% YoY
In 1H26, the company's revenue grew by 5.69% YoY to RMB1,731mn, and the gross margin fell by 2.18pp YoY to 30.55%. By business, 1) water operations revenue grew by 7.98% YoY to RMB1,284mn, and the gross margin was flat at 37.3% YoY (+0.02pp). The company continued to strengthen its industrial water business layout; as of 1H26, total industrial water operating capacity reached c. 430k tonnes/day (vs 200k tonnes/day in 1H25). 2) Engineering construction: revenue grew by 1.22% YoY to RMB403mn, and the gross margin fell by 10.42pp YoY to 8.27%, possibly due to differences in the profitability of projects whose revenue was recognized during the period. 3) Equipment sales: revenue fell by 10.96% YoY to RMB38mn, and the gross margin declined by 0.57pp YoY to 32.63%.
1H26 capex YoY shrank; expense ratio down 2.6pp YoY
In 1H26, the company's expense ratio fell by 2.62pp YoY to 11.73%, with the administrative/R&D/financial expense ratio at 3.38/0.41/6.06%, down 1.38/0.31/0.60pp YoY. The decline in the administrative expense ratio was due to reduced management personnel compensation following the organizational structure adjustment. In terms of cash flow, 1H26 net operating cash flow was RMB85mn (-44% YoY), owing to concentrated payments of historical engineering payables and the release of restricted funds in 1H25. Capex (cash paid for fixed assets, intangible assets, and other long-term assets) was RMB305mn (-57% YoY), and free cash flow was -RMB220mn (vs -RMB557mn in 1H25, improving YoY). We believe the company's water operations foundation is solid, and coupled with organizational structure optimization and ongoing cost control, profitability could improve.
Earnings forecasts and valuation
We maintain our earnings forecasts, projecting 2026-2028 attributable NP of RMB365/387/414mn, with EPS of RMB0.54/0.57/0.61. The company's peers trade at an average 2026E PE of 14.4x on Wind consensus (previous: 17.7x). We assign the company a 2026E PE of 14.4x, yielding our target price of RMB7.78 (previous: RMB9.67, based on a 2026E PE of 17.7x).
Risks: New orders for water and environmental engineering falling short of our expectations; deterioration in collection of wastewater treatment receivables; weaker synergies with CECEP than we expect.

　　节能国祯发布半年报，2026年H1实现营收17.31亿元（yoy+5.69%），归母净利2.02亿元（yoy+11.82%），扣非净利2.00亿元（yoy+11.94%）。其中Q2实现营收9.25亿元（yoy-1.25%，qoq+14.74%），归母净利1.12亿元（yoy-0.69%，qoq+24.81%）。公司水务运营业务稳健，叠加组织架构优化、费用管控持续推进，有望支撑盈利能力改善，维持“增持”评级。
　　1H26水务运营收入同比+8%，工程建造业务毛利率承压
　　1H26公司营业收入同比+5.69%至17.31亿元，毛利率同比-2.18pp至30.55%。分业务来看，水务运营收入显著提升，工程建造业务毛利率承压。1）水务运营：收入同比+7.98%至12.84亿元，毛利率同比+0.02pp至37.3%；公司持续强化工业水业务布局，截至1H26工业水总运营规模约43万吨/日（1H2520万吨/日）。2）工程建造：收入同比+1.22%至4.03亿元，毛利率同比-10.42pp至8.27%，或因当期确认收入的项目盈利能力存在差异。3）设备销售：收入同比-10.96%至0.38亿元，毛利率同比-0.57pp至32.63%。
　　1H26资本开支同比收缩，期间费用率同比-2.6pp
　　1H26公司期间费用率同比-2.62pp至11.73%，其中管理费用率/研发费用率/财务费用率3.38%/0.41%/6.06%，同比-1.38pp/-0.31pp/-0.60pp，管理费用率下滑主因公司组织架构调整优化致管理人员薪酬减少。现金流方面，1H26经营性现金流净额0.85亿元（yoy-44%），主因历史工程款项集中支付、且1H25存在受限资金释放流入，资本开支（购建固定资产、无形资产和其他长期资产支付的现金）3.05亿元（yoy-57%），自由现金流-2.20亿元（1H25-5.57亿，同比向好）。我们认为，公司水务运营基本盘稳健，叠加组织架构优化、费用管控持续推进，有望支撑盈利能力改善。
　　盈利预测与估值
　　维持盈利预测，我们预计公司2026-28年归母净利润3.65/3.87/4.14亿元，对应EPS为0.54/0.57/0.61元。可比公司2026年Wind一致预期PE均值为14.4倍（前值17.7x），给予公司2026年14.4倍PE，目标价7.78元（前值9.67元，对应2026年17.7倍PE）。
　　风险提示：水务和环境工程新增订单不及预期，污水处理运营回款情况恶化，中节能协同效应不及预期。