CHAIRMAN'S MESSAGE

As we present our report for the financial year ended 31 December 2025, we do so against a backdrop of a global economy on a modest recovery but yet grappling with persistent geopolitical tensions. Domestically, China’s focus on stabilising growth, promoting high-quality development, and advancing environmental sustainability provides a pertinent context for our operations. For the Group, the past year was defined by resolute execution of our refined strategy, with renewed focus on our core strengths.

The year 2025 marked a pivotal turnaround for the Group. Our strategic shift towards the water supply and wastewater treatment services, which are essential utilities, initiated in prior years, began to deliver tangible results, improving the Group’s operational stability and financial performance.

The year 2025 was one in which the Group sought to strengthen its financial position against a very challenging backdrop. While we recorded a loss attributable to shareholders, the loss narrowed considerably compared with the previous year. This improvement was attributed to both the substantial resolution of the legacy issues around the property project in Yichang City and also continued growth in the core operations, with revenue growing 17.9% to RMB 109.52 million, primarily led by the water pipeline construction segment. This demonstrates the correct direction in our strategic focus and underlying resilience in our businesses.

We maintained our disciplined emphasis on financial management. Cash and cash equivalents amounted to RMB36.65 million as at 31 December 2025. The Group disposed of certain non-core investment properties, which enhanced our liquidity and streamlined asset portfolio to better align with our core utility business focus. Managing trade and other receivables remains an important priority, which includes substantial amounts receivable from government entities for wastewater treatment services. We are committed to strengthening credit management and collection processes to ensure continued sustainability in our operations.

The Group continues to address the residual challenges arising from its strategic shift. Legal proceedings related to the 2022 disposal of our stake in Beijing Kaiyuanwanjia Management Consulting Co., Ltd (“KYWJ”) and other outstanding legal matters remain ongoing, which we will continue to manage prudently. The Group is focused on resolving these matters as soon as we can so as to minimise any potential long-term impact on the Group.

In April 2023, the Board’s Independent Directors appointed an independent reviewer, RSM Corporate Advisory Pte Ltd (“RSMCA”) to conduct an investigation into the 2022 disposal. RSMCA has finalised its review work and issued its report. The Company made an announcement on the matter on 16 March 2026.

Entering 2026, our strategy is clear, focused, and built upon the foundation rebuilt in 2025. The Group will continue to concentrate resources and managerial effort on the core water and environmental services. We are well-positioned to contribute to and benefit from the sustained national priority placed on environmental infrastructure in China. We are focused on the excellent execution of our existing business - optimising operations, managing costs prudently, and pursuing organic growth opportunities within our core competencies to deliver sustainable shareholder value.

Against a backdrop of cautious optimism for both the global and domestic economies, operational discipline and financial resilience remain our top priorities. We will maintain a rigorous approach to capital allocation and risk management, ensuring the Group navigates the future from a position of strength.

Our commitment to responsible business practices is integral to our long-term strategy. Following the release of our FY2024 ESG Report, we are further advancing our efforts to embed ESG considerations more deeply into day-to-day operations and strategic planning - ensuring that we operate sustainably and deliver positive value to all our stakeholders.

On behalf of the Board, I extend my gratitude to our shareholders for your steadfast support and patience throughout this period of transformation. Your trust has been indispensable. My thanks also go to my fellow Board members, our dedicated management team, and all our employees for their resilience and commitment. We are also grateful to our customers and business partners for their continued collaboration.

This journey in 2025 has validated our strategic refocusing. While mindful of ongoing challenges, we look forward with greater confidence. With a clear focus on our role in the water services sector, the Group is committed to advancing with resilience and an unwavering focus on sustainable value creation for all our stakeholders.