(Incorporated in Bermuda with limited liability) （於百慕達註冊成立之有限公司） (Stock code: 371) （股份代號：371） NOTIFICATION LETTER 通知信函 29 April 2025 Dear Registered Shareholders (1) , Beijing Enterprises Water Group Limited (the "Company") – Notice of publication of 2024 Annual Report, Circular dated 29 April 2025 containing Notice of Annual General Meeting together with the Form of Proxy and 2024 Sustainability Report (collectively the "Current Corporate Communications") The Current Corporate Communications of the Company ...

此乃要件 請即處理 閣下如對本通函任何方面或應採取的行動有任何疑問，應諮詢 閣下的持牌證券商或其他註 冊證券機構、銀行經理、律師、專業會計師或其他專業顧問以獲取獨立意見。 閣下如已出售或轉讓所有名下的北控水務集團有限公司股份，應立即將本通函及隨附的代 表委任表格送交買主或承讓人，或經手買賣或轉讓的銀行、持牌證券商或註冊證券機構或其 他代理商，以便轉交買主或承讓人。 香港交易及結算所有限公司及香港聯合交易所有限公司對本通函的內容概不負責，對其準 確性或完整性亦不發表任何聲明，並明確表示概不對因本通函全部或任何部份內容而產生 或因倚賴該等內容而引致的任何損失承擔任何責任。 （於百慕達註冊成立之有限公司） （股份代號：371） 建議發行及購回股份之一般授權、 重選退任董事及 繼續委任任期超過九年之獨立非執行董事 及 股東週年大會通告 載有北控水務集團有限公司董事會推薦建議之董事會函件載於本通函第3頁至第8頁。 北控水務集團有限公司謹訂於二零二五年六月三日（星期二)下午三時正假座香港灣仔港灣 道18號中環廣場66樓舉行股東週年大會，大會通告載於本通函第20頁至第24頁，並隨函附上 供本公司股東週年大會使用的代表委任表 ...

Financial Performance - For the fiscal year ending December 31, 2024, the company achieved a total revenue of RMB 24,270,499,000, representing a year-on-year decrease of 1.0%[11] - The company's net profit attributable to shareholders was RMB 1,677,600,000, reflecting a year-on-year decline of 11.5%[11] - The company's operating revenue decreased by 1% to RMB 24.27 billion, with a 12% reduction in profit attributable to shareholders, amounting to RMB 1.68 billion[22] - The total revenue for the previous year was RMB 24,519.4 million, indicating a slight decrease in overall performance year-over-year[27] - For the fiscal year ending December 31, 2024, the company's total revenue was RMB 24,270.5 million, a decrease of 1% compared to RMB 24,519.4 million in 2023[30] - The company's net profit attributable to shareholders for 2024 was RMB 6,246.2 million, down 4% from RMB 6,487.8 million in 2023[30] - The total revenue from water treatment services in China reached RMB 8.75 billion, with a gross margin of 57%[23] - The company's overseas water treatment services generated revenue of RMB 429.2 million, with a gross margin of 15%[23] - The water treatment services segment generated RMB 11,622.2 million in revenue, accounting for 47% of total revenue, with a profit attributable to shareholders of RMB 4,672.2 million, representing a 72% margin[26] - The construction of BOT water projects contributed RMB 2,616.0 million in revenue, with a gross profit margin of 17% and a profit attributable to shareholders of RMB 286.8 million[24] - The technology services and equipment sales segment reported revenue of RMB 2,549.4 million, with a gross profit margin of 42% and a profit attributable to shareholders of RMB 499.7 million[24] - The revenue from urban resource services was RMB 6,027.7 million, with a profit attributable to shareholders of RMB 108.5 million, reflecting a 2% margin[24] - The total revenue from sewage and reclaimed water treatment services was RMB 8,748.8 million, with a net profit attributable to shareholders of RMB 3,873.2 million[38] Strategic Focus and Development - The company is focusing on cash flow management and enhancing operational efficiency as part of its strategic transformation towards high-quality development[10] - The company is actively pursuing market expansion and technological innovation to support its strategic goals[12] - The company plans to focus on light asset transformation and deepen strategic changes in 2024, aiming to enhance operational efficiency[14] - The company has successfully secured over a hundred light-asset project contracts, contributing to the steady increase in the proportion of light-asset business[12] - The light-asset business is becoming a significant contributor to the company's overall performance, enhancing its "new content" and "gold content"[12] - The establishment of two technology platforms, Beikong Water Future Technology Co., Ltd. and Beikong Cloud Service Co., Ltd., aims to drive innovation and sustainable development[17] - The company is committed to integrating sustainable development principles into its long-term strategy, enhancing customer communication, and improving service quality[18] - The company has established a business strategy focused on "quality growth, valuable assets, cash profits, and capable organizations," aiming to enhance core capabilities such as quality delivery and smart operations[100] Governance and Corporate Structure - The board of directors is committed to maintaining high corporate governance standards to ensure transparency and protect shareholder rights[99] - The board consists of various members, including executive, non-executive, and independent directors, with a focus on compliance with corporate governance codes[103][104] - The board aims to ensure gender diversity and avoid a single-gender composition among its members[113] - The company has a board diversity policy in place since 2013, focusing on various factors such as gender, age, and professional experience for board member selection[111] - The board has appointed new directors to maintain a balance of experience and skills, with recent appointments made in February and June 2024[115] - The company has established four committees under the board to enhance governance practices[124] - The audit committee is responsible for overseeing the integrity of the company's financial statements and the relationship with the auditor[125] - The company has adopted a nomination policy outlining the selection criteria and procedures for new and reappointed directors[130] Risk Management and Compliance - The company has established a risk management framework consisting of "three lines of defense" to ensure effective risk management and internal controls[143] - The risk management department has implemented strict guidelines and procedures to monitor each investment unit, aiming to reduce risks and external impacts[146] - The company has taken corrective actions based on last year's findings and deficiencies in internal controls[147] - The audit committee reported no significant internal control deficiencies as of December 31, 2024, affirming the effectiveness of the group's risk management and internal control systems[149] - The group has established a whistleblowing policy to allow employees and stakeholders to report potential misconduct confidentially[151] - The group has implemented an anti-bribery and anti-corruption system to prevent fraudulent activities among employees[152] Shareholder Engagement and Communication - The company is committed to regular communication and reasonable disclosure of information to shareholders, utilizing various channels for effective engagement[162] - The board believes that effective investor relations play a crucial role in creating shareholder value and enhancing company transparency[163] - The company has actively taken measures to improve communication with shareholders and increase transparency as of the fiscal year ending December 31, 2024[165] - The company has established a dedicated email account for inquiries from shareholders or potential investors[162] - The company has a policy in place to solicit feedback from shareholders and institutional investors[162] Employee and Social Responsibility - The company emphasizes the importance of maintaining close relationships with employees, customers, and business partners to ensure sustainable development[138] - The company provides competitive compensation and benefits to employees based on their merits and performance[138] - The gender diversity ratio among employees is approximately 53% male and 47% female, indicating satisfactory gender diversity within the workforce[118] Financial Instruments and Debt Management - The total debt amounted to RMB 75,502,200,000, including bank and other borrowings of RMB 60,931,000,000 and corporate bonds of RMB 14,571,200,000[90] - The debt-to-equity ratio as of December 31, 2024, was 1.19, up from 1.18 as of December 31, 2023, primarily due to increased borrowings[91] - The company issued medium-term notes with an outstanding principal amount of RMB 1,000,000,000 at an annual interest rate of 4.49%, maturing in January 2029[199] - A wholly-owned subsidiary issued medium-term notes with an outstanding principal of RMB 2,000,000,000, maturing in March 2028 and March 2030, with interest rates of 3.43% and 3.98% respectively[199] - The company has outstanding medium-term notes of RMB 1,500,000,000 at an interest rate of 3.98%, maturing in April 2029[200]

Core Viewpoint - The water and environmental protection industry is leveraging technological innovation to promote intelligent, resource-efficient, and low-carbon water environment governance, contributing to sustainable development and water resource protection through initiatives like "Beijing Water Solutions" [1][9]. Group 1: Smart Water Treatment Operations - North Control Water integrates digital technology with wastewater treatment, achieving high-quality automated operations without manual intervention, significantly improving operational efficiency [1][3]. - Emergency response instances at the Taziba Wastewater Treatment Plant have decreased from 23 times per month to 1-2 times, and equipment control rates have increased from 54% to 86%, ensuring stable and efficient operations [3]. Group 2: Reclaimed Water Initiatives - The Yinchuan First Reclaimed Water Plant, the largest in Northwest China, features a garden-style design that integrates recreational spaces with wastewater treatment, promoting environmental harmony and urban development [5]. - The park utilizes reclaimed water for irrigation, demonstrating a successful model of co-existence between environmental sustainability and urban growth [5]. Group 3: Low-Carbon Technology Advancements - The BE-Fenton advanced oxidation process, combined with an automated dosing control system, has been implemented in multiple projects, achieving a COD removal rate of 40%-60% and reducing operational costs by 30%-50% [5]. - This technology is applied in six projects with a total design capacity of 145,500 cubic meters per day, potentially reducing difficult-to-degrade COD by approximately 2,610 tons per year [5]. Group 4: Clean Energy Utilization - North Control Water has installed distributed photovoltaic power generation systems on water plant rooftops, replacing traditional fuel with clean energy, with nearly 50 plants adopting this technology and a total installed capacity exceeding 160 megawatts [7]. Group 5: Future Water Management Strategies - The "Future New Water Development Report" proposes a strategy for coastal seawater desalination, aiming to establish a short-distance water cycle centered on desalination within 100 kilometers of the coast [8][9]. - The report emphasizes the need for industrial policies to promote desalination development, as China's current desalination capacity accounts for only 3% of the global total, which is inadequate given the country's water scarcity [9].

Group 1 - The central government has issued opinions to optimize the pricing mechanism for water, electricity, and gas, emphasizing the need for a reasonable operation of price levels and important commodity prices [1] - The new pricing policy aims to enhance the profitability of water supply operators by implementing a progressive pricing system for non-residential water usage, which is expected to drive profit recovery and growth [1] - The 2021 urban water pricing management measures have been reiterated, focusing on cost auditing as the basis for setting water prices, ensuring that water supply companies can achieve reasonable returns [1] Group 2 - Shenzhen's water price adjustment hearing is scheduled for April 11, with proposed increases of 13.1% to a new price of 3.8991 yuan per cubic meter [2] - Historical trends indicate that price adjustments in major cities can catalyze water price reforms, potentially improving the long-term low returns in the domestic water supply industry [2] - Companies such as China Water Affairs (00855) are expected to benefit significantly from the ongoing improvements in water pricing policies, with a notable portion of their revenue derived from water supply operations [2]

Core Viewpoint - Beikong Water Group reported a decline in revenue and profit for the fiscal year ending December 31, 2024, primarily due to reduced contributions from BOT water service projects [1][2] Financial Performance - The company recorded a revenue of 24.27 billion RMB, a year-on-year decrease of 1.02% [1] - Shareholder profit was 1.678 billion RMB, down 11.5% year-on-year [1][2] - Basic earnings per share were 15.63 cents [1] Dividend Information - The company proposed a final dividend of 0.091 HKD per share, reflecting a year-on-year increase of 2.5% [1][2] - The dividend payout ratio increased by 16.8 percentage points to 95.2% [1] Cash Flow and Profit Quality - Cash-generating business revenue accounted for 85.8% of total earnings, up 7.8 percentage points year-on-year [1] - Free cash flow increased by 35% to 1.48 billion RMB, with a target to increase by another 1 billion RMB this year [1] Market Analysis - Citigroup noted that the profit decline was not concerning due to higher non-cash impairment losses, indicating improved profit quality [1] - Huatai Securities highlighted that the net profit was below their expectation of 1.876 billion RMB, mainly due to increased impairment losses [2]

Investment Rating - The report maintains a "Buy" rating for the company [2][8]. Core Views - The company's revenue decreased due to a decline in construction income, while the total dividend payout saw a slight increase. Capital expenditures continue to contract, leading to improved free cash flow [3][8]. Financial Summary - In 2024, the company achieved revenue of 24,270 million RMB, a year-on-year decline of 1%. The net profit attributable to shareholders was 1,678 million RMB, down 12% year-on-year. The decline in revenue was primarily due to a 42% drop in BOT water project construction income, which amounted to 2,616 million RMB [8]. - The total dividend payout for the year was 1,435 million RMB, slightly up from 1,420 million RMB in 2023 [8]. - The overall gross margin remained stable at 37%, while management expenses decreased by 7% to 3,071 million RMB [8]. Operational Performance - The company operated sewage treatment capacity of 19.65 million tons and recycled water plants of 2.09 million tons in 2024, with sewage treatment volume increasing by 5%. The average contract price for water treatment rose to 1.54 RMB/ton from 1.49 RMB/ton in 2023, with a gross margin increase of 2 percentage points to 57% [8]. - The operational water supply capacity was 10.24 million tons, with a 2% increase in supply volume. The actual average contract price for water supply remained stable at 2.15 RMB/ton, while the gross margin decreased by 5 percentage points to 40% due to increased amortization from more water pipe construction and renovation [8]. - Revenue from technical services and equipment sales reached 2,549 million RMB, a 4% year-on-year increase, with a gross margin of 42%, down 1 percentage point [8]. - Urban resource service revenue grew by 19% year-on-year to 6,028 million RMB, with a gross margin of 19%, down 1 percentage point [8]. Capital Expenditure - The company's total capital expenditure for 2024 was 4,105 million RMB, a significant decrease from 6,990 million RMB in 2023. Of this, 1,694 million RMB was allocated for the acquisition of property, plant, and equipment, while 2,350 million RMB was used for the construction and acquisition of water plants [8].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 2.74 [7]. Core Views - The company reported a revenue of RMB 24.27 billion for 2024, a decrease of 1.0% year-on-year, primarily due to a decline in contributions from BOT water projects. The net profit attributable to shareholders was RMB 1.678 billion, down 11.5% year-on-year, which was below expectations due to increased impairment losses. The dividend per share (DPS) for 2024 is set at HKD 0.161, a 2.5% increase from 2023, resulting in a dividend yield of 6.9% based on the closing price on March 27, 2025 [1][4]. Revenue and Profitability - The wastewater and reclaimed water treatment service revenue increased by 6% to RMB 9.18 billion, driven by new water volume from plants that commenced operations during the year. However, the water governance construction service revenue fell by 36% to RMB 3.44 billion, with BOT plant construction revenue down 42% to RMB 2.62 billion, reflecting the company's strategy to reduce investments in line with its asset-light transformation [2][3]. Cash Flow and Dividend Policy - The company has maintained positive free cash flow for three consecutive years. The capital expenditure for 2024 is expected to decrease by 41% to RMB 4.11 billion, with further reductions anticipated. The implementation of user-pay trends and potential increases in water prices are expected to contribute positively to performance. The payout ratio for dividends is projected to reach 94% in 2024, indicating strong potential for future dividend increases as free cash flow improves [3][4]. Earnings Forecast - The report revises down the earnings forecast for the company, projecting net profits attributable to shareholders of RMB 1.543 billion, RMB 1.643 billion, and RMB 1.724 billion for 2025, 2026, and 2027 respectively. The expected earnings per share (EPS) for 2025 is RMB 0.15, with a target price based on a 16.5x PE ratio for 2025 [4][6].

免責聲明 | 代扣所得稅信息 | | | --- | --- | | 股息所涉及的代扣所得稅 | 不適用 | | 發行人所發行上市權證/可轉換債券的相關信息 | | | 發行人所發行上市權證/可轉換債券 | 不適用 | | 其他信息 | | | 其他信息 | 不適用 | | 發行人董事 | | | 於本公佈日期，本公司董事會由七名執行董事包括熊斌先生(主席)、周敏先生(行政總裁)、李海楓先生、沙寧女士、張文江先生、 | 董渙樟先生及李力先生，一名非執行董事袁建偉先生，以及五名獨立非執行董事包括佘俊樂先生、郭銳先生、周安達源先生、戴曉 | | 虎先生及陳肇始女士組成。 | | 第 2 頁 共 2 頁 v 1.1.1 EF002 | 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性或完整性亦不發表任何聲明，並明確表示，概不對因 | 公告全部或任何部份內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 | | --- | --- | | | 股票發行人現金股息（可選擇貨幣）公告 | | 發行人名稱 | 北控水務集團有限公司 | | 股份代號 | 00371 | | 多櫃檯股份 ...

Financial Performance - For the year ending December 31, 2024, the company's profit attributable to shareholders decreased by 11.5% to RMB 1,677,600,000 from RMB 1,895,700,000 in the previous year[4]. - The company's EBITDA was RMB 8,525,300,000, a decrease of 4.5% compared to RMB 8,931,300,000 last year[4]. - The total revenue for the year was RMB 24,270,499,000, down from RMB 24,519,374,000 in the previous year, representing a decline of approximately 1.0%[5]. - The gross profit for the fiscal year 2024 was RMB 8,989,098,000, slightly down from RMB 9,000,753,000 in 2023, indicating a stable gross margin[18][19]. - The net profit attributable to shareholders for 2024 was RMB 1,677,600,000, compared to RMB 1,895,681,000 in 2023, reflecting a decrease of approximately 11.5%[19][22]. - The company's operating profit for 2024 was RMB 7,528,297,000, down from RMB 7,841,632,000 in 2023, reflecting a decrease of about 4%[18][19]. - The total tax expense for the year is RMB 812,083,000, a decrease of 15.8% from RMB 964,112,000 in the previous year[26]. - The basic earnings per share for the year is RMB 1.567694 billion, down from RMB 1.825397 billion in the previous year, reflecting a decrease of 14.1%[29]. Dividends and Shareholder Returns - The company proposed a final dividend of HKD 0.091 per share, with a total annual dividend of HKD 0.161 per share[4]. - The proposed final dividend per share is HKD 0.091, an increase from HKD 0.087 in the previous year, resulting in a total proposed dividend of RMB 1,474,902,000[26]. - The board proposed a final dividend of HKD 0.091 per share for the fiscal year ending December 31, 2024, subject to shareholder approval[114]. Assets and Liabilities - The total assets as of December 31, 2024, amounted to RMB 166,571,603,000, compared to RMB 165,493,193,000 in the previous year[9]. - Total equity as of December 31, 2024, is RMB 54,133,475,000, an increase from RMB 31,171,095,000 in 2023[10]. - Total liabilities decreased slightly to RMB 110,609,173,000 from RMB 111,359,718,000 year-over-year[10]. - The company’s bank and other borrowings decreased to RMB 10,366,940,000 from RMB 13,145,188,000[10]. - The company’s total non-current liabilities increased to RMB 68,861,047,000 from RMB 67,340,367,000[10]. - The company’s total current liabilities decreased to RMB 42,498,671,000 from RMB 43,268,806,000[10]. - The group recorded revenue of RMB 828,200,000 from integrated governance projects, a slight decrease from RMB 839,900,000 in the previous year, with net profit from these projects dropping to RMB 490,000,000[61]. Revenue Streams - The company reported a significant increase in revenue from wastewater and recycled water treatment services, reaching RMB 9,178,030,000 in 2024, up from RMB 8,643,409,000 in 2023, marking a growth of 6.2%[22]. - The revenue from construction services decreased significantly to RMB 3,444,184,000 in 2024 from RMB 5,380,463,000 in 2023, a decline of approximately 36.1%[22]. - The revenue from urban services increased to RMB 5,310,493,000 in 2024, compared to RMB 4,343,559,000 in 2023, showing a growth of 22.2%[22]. - The total interest income from service concession arrangements was RMB 3,100,665,000 in 2024, up from RMB 3,023,301,000 in 2023, indicating a positive trend in this revenue stream[22]. - The water treatment services segment generated revenue of RMB 12,249.2 million, an increase of 5% from RMB 11,622.2 million in 2023[45]. - The technology services and equipment sales segment reported revenue of RMB 2,549.4 million, a 4% increase from RMB 2,459.1 million in 2023[45]. Operational Efficiency and Management - Management and financial expenses have been continuously reduced, contributing to improved operational efficiency[4]. - The company has been recognized as the top influential enterprise in China's water industry for 14 consecutive years[4]. - The company is actively promoting the research and development of new technologies and processes, including AOA, to enhance water plant quality and efficiency[4]. - The company has changed its functional currency from HKD to RMB to better reflect its economic substance[12]. - The group aims to enhance customer communication and experience, focusing on responsible marketing and improving customer satisfaction[105]. - The group is committed to building a sustainable development partner network, integrating sustainability into the entire lifecycle management of suppliers[105]. Employee and Corporate Governance - As of December 31, 2024, the total employee cost was RMB 5,615,717,000, an increase from RMB 5,330,504,000 for the previous year[107]. - The group employed 85,870 employees as of December 31, 2024, including 67,219 from North Control Urban Resources[108]. - The board consists of seven executive directors, one non-executive director, and five independent non-executive directors as of the announcement date[128]. - The audit committee, consisting of three independent non-executive directors, has reviewed and approved the financial results for the year ending December 31, 2024[119]. Future Outlook and Strategic Initiatives - The group has planned a systematic digital transformation project for 2024, focusing on operational efficiency and data service analysis, aiming for comprehensive digital transformation in financial management[103]. - The establishment of two technology platforms, North Water Technology and North Water Cloud Service, aims to enhance sustainable development and digital transformation in the water industry[102]. - The company will suspend share transfer registration from June 12 to June 13, 2025, to qualify for the proposed final dividend[116].