Guosen Securities Co.,Ltd. has issued a research report maintaining an "outperform" rating for SHANGHAI IND H (00363), citing the company's steady infrastructure and environmental operations alongside outstanding growth in consumer goods and healthcare segments. The improved dividend rate and declining financial costs provide support for future investment value. Guosen Securities Co.,Ltd. forecasts that SHANGHAI IND H's attributable net profit will reach HK$2.934 billion, HK$3.084 billion, and HK$3.197 billion in 2025-2027 respectively, representing year-on-year growth rates of 4.8%, 4.8%, and 3.7%.

Guosen Securities Co.,Ltd.'s main views are as follows:

**Infrastructure and Environmental Segment Core Business Remains Steady** In the first half of this year, the infrastructure and environmental segment achieved revenue of HK$4.433 billion and net profit of HK$933 million. The firm believes the company's core business maintains stability, with the highway segment generating revenue of HK$1.019 billion, up 5.1% year-on-year, and traffic volume increasing 2.1% year-on-year. Shanghai Industrial Environment's attributable net profit reached RMB344 million, up 7.1% year-on-year, demonstrating strong resilience in solid waste and water treatment sectors.

**Consumer Goods and Healthcare Segments Show Outstanding Performance** The consumer segment achieved revenue and net profit growth of 11% and 26% respectively year-on-year, reaching HK$1.9 billion and HK$433 million. Nanyang Tobacco business performed strongly, achieving revenue of RMB1.273 billion, up 16.4% year-on-year, with net profit of RMB337 million, up 20% year-on-year. Sales volume surged 31% year-on-year, with smooth overseas market expansion.

The healthcare segment's net profit reached HK$141 million, up 118.4% year-on-year, mainly benefiting from one-time gains recognized by Shanghai Pharmaceutical Holdings.

**Company's Financial Position Improves with Positive Dividend Policy** The company recovered funds through the sale of GDH Guangdong Environmental Protection, with part of the proceeds used to repay bank loans. Interest-bearing debt decreased to HK$58.513 billion, asset-liability ratio dropped to 51.5%, and financial expenses decreased 15% year-on-year.

Regarding dividends, the company's 2025 interim dividend per share was HK$0.42, totaling HK$457 million, flat compared to the same period last year, but the payout ratio increased from 38% to 43.8%.