In early August, the Hang Seng Index touched a low of 24,372 points before rising to a high of 25,766 points by mid-August, gaining nearly 5.5% or approximately 1,400 points in less than half a month, which excited the market. During the same period, BINHAI INV (02886), one of China's leading clean energy operators primarily engaged in investing, constructing and operating urban gas pipeline networks and providing pipeline installation and construction services in mainland China, surged over 16.3% (from HK$1.04 to HK$1.21), outperforming the Hang Seng Index by nearly twofold and reaching its highest level since April 2024 (spanning approximately sixteen months).

As the company approached the release of its interim results for 2025, this performance likely reflected some investors' early positioning. The results met market expectations, with profit attributable to shareholders achieving growth for the second consecutive year to approximately RMB173 million, setting a new post-pandemic high for the same period. The company demonstrated its capability to maintain its annual gas sales target unchanged.

In the first half of 2025, the net operating margin reached 6.0%, up 1.2 percentage points from 4.8% in the same period last year, also marking a new post-pandemic high for the period and significantly exceeding the industry average of 3.7%. This demonstrates the group's high-quality performance during the period.

Due to the impact of warm winter weather in the first quarter, the group's total gas sales volume in the first half of 2025 was 1.14 billion cubic meters, down approximately 14% year-on-year. However, second-quarter data alone showed an increase of about 13% year-on-year, indicating that the group's gas sales business continues to develop rapidly.

Facing pressure from declining total gas sales volume in the first half, the group maintains its full-year target of approximately 1.87 billion cubic meters in managed gas sales volume (with 830 million cubic meters completed in the first half).

**Active Expansion of Value-Added Services in Recent Years**

This move not only demonstrates management's confidence in business prospects but also reflects the positive impact of the group's continuously increasing sales contracts and active expansion of sales channels. We believe BINHAI INV has ample conditions to continue its high-quality performance for the full year 2025.

Facing China's real estate market still in a slow recovery phase, as of the end of June 2025, the group's total user base grew to 2.47 million households, up 1% year-on-year, with new additions of approximately 28,600 households, achieving 40% of the annual target. Among these, commercial and industrial users grew 7%.

Meanwhile, to enhance user stickiness, the group has actively expanded its value-added services business in recent years, including small-scale installation, gas appliance sales, insurance services, and non-residential maintenance services. Revenue and gross profit from this business both grew approximately 7%.

**Notable New Additions: Home Decoration Business and E-commerce Platform**

It's worth noting that gas appliance sales and non-residential maintenance services showed outstanding gross profit growth rates of 91.0% and 60.5% respectively, driving the comprehensive gross margin of this business to maintain a high level of 67.4%, which obviously helps improve the group's overall gross margin.

We believe the group's impressive value-added services performance is directly related to the launch of the "TaiYueJia" brand in August 2024. Through the concept of "Tai Peace of Mind, Yue Lifestyle, Enjoy Quality Products," the group not only provides one-stop smart home solutions but also actively expands "gas+" business, successfully opening a new chapter for related businesses.

The group actively seizes market opportunities and drives business development with two new developments. First, the home decoration business has officially entered service, more precisely identifying and meeting users' potential needs through complete processes and multiple touchpoints. Second, an e-commerce platform (WeChat mini-program) is being constructed and expected to officially launch by the end of September.

The e-commerce platform includes three major systems: a store system, an after-sales service system (to address offline management pain points in business lines), and a mobile online mall (to open TaiYueJia's online sales channels).

We believe the group's active expansion of value-added services helps continuously improve overall revenue, gross profit, and profit margins, and has successfully driven steady business growth in recent years, laying a foundation for continued positive future performance.

At the current stock price level of HK$1.10, the P/E ratio is less than 8 times, while the industry average exceeds 12 times, reflecting significant potential for continued price recovery. The medium-term target can be set at HK$1.4.