Dongjiang Environmental (00895 HK)'s 2019 revenue increased 5.3% year-on-year to 3.459 billion yuan (RMB, same below). Shareholders' net profit increased 3.9% year over year to 424 million yuan. The performance was slightly worse than expected, mainly due to higher-than-anticipated asset impairment charges. The company's overall gross margin improved by 0.8 percentage points to 36.1%. From 2019 to 2022, we expect total revenue to increase at a compound annual growth rate of 13.4%, with industrial resource utilization revenue and industrial waste treatment and disposal revenue increasing at a compound annual growth rate of 5.3% and 20.5%, respectively. Furthermore, we expect overall gross margin to increase from 36.1% in 2019 to 38.0% in 2022, while return on net assets will increase from 9.3% in 2019 to 11.2% in 2022. Our earnings per share forecasts for 2020 to 2022 are $0.558, $0.680, and $0.778, respectively. Even if 2019's results are slightly worse than expected, the company's revenue and profit growth will accelerate due to strong reserve capacity and gradually improved profitability. The target price was slightly lowered to HK$7.50, which is equivalent to 12.2/ 10.0/ 8.8 times the expected price-earnings ratio for 2020/ 2021/2022. Maintain “collected” investment ratings.