Core Viewpoint - China Water Affairs (00855) is currently valued at a significant discount compared to its peers, with a target price of HKD 7.80 and a "Buy" rating from CITIC Securities, reflecting a 20% valuation discount based on a target PE of 10x for FY2025 [1] Group 1: Financial Performance - The company's overall gross margin improved by 0.7 percentage points to 37.8% in FY2025, with notable increases in profitability across all business segments, including urban water supply, pipeline drinking water, and environmental protection [2] - The company’s sales, management, and financial expense ratios showed mixed changes, with financial expenses increasing due to a high proportion of US dollar debt, but there is potential for reduction through debt restructuring and a declining interest rate environment [2] Group 2: Growth Drivers - In FY2025, the company commissioned 81.7 million tons per day of new water production capacity, leading to a 7.0% increase in water sales volume to 1.5 billion tons, with further growth expected as additional capacity comes online in FY2026 [3] - The company has implemented water price adjustments in several projects, with expectations that total adjustments could exceed 1 million tons per day, benefiting from ongoing reforms in water pricing across major cities [3] Group 3: Cash Flow and Dividends - For the first time since 2020, the company achieved positive free cash flow of HKD 1.58 billion in FY2025, supported by a reduction in capital expenditures [4] - The company maintained its dividend at HKD 0.28 per share, with a 12 percentage point increase in the payout ratio to 42%, indicating a commitment to returning value to shareholders [4]

Core Insights - The company reported a total revenue of HKD 12.2 billion for FY2025, a decrease of 5.1% year-on-year, and a net profit attributable to shareholders of HKD 1.075 billion, down 29.9% year-on-year [1][2] Revenue Breakdown - The company's main business revenue was HKD 11.656 billion, a decline of 9.4% year-on-year, primarily due to reduced income from water supply and direct drinking water installation, maintenance, and construction services [2] - Revenue from the urban water supply segment was HKD 7.498 billion, down 9.4% year-on-year, with segment profit slightly increasing by 0.1% to HKD 2.493 billion due to cost control [2] - The direct drinking water segment saw revenue drop by 61.9% to HKD 0.657 billion, with segment profit decreasing by 58.9% [2] - The environmental protection segment achieved revenue of HKD 1.523 billion, up 42.2% year-on-year, with segment profit increasing by 56.9% [2] - Total construction revenue was HKD 0.664 billion, down 19.7% year-on-year, with segment profit decreasing by 9.3% [2] - Property revenue reached HKD 0.361 billion, with segment profit increasing by 16.5% [2] Operational Performance - Water supply operations generated revenue of HKD 3.526 billion, an increase of 6.5% year-on-year, with water sales volume rising by 7.4% to 1.5 billion tons [3] - The average water price was HKD 2.35 per ton, with over 20 projects initiating price adjustment procedures [3] - Direct drinking water operations revenue increased by 7.2% to HKD 0.315 billion, with a compound annual growth rate of 29.8% from FY22 to FY25 [4] - Direct drinking water equipment revenue surged by 226.3% to HKD 0.078 billion [4] Capital Expenditure and Cash Flow - Capital expenditure peaked at HKD 5.33 billion in FY2024 and is projected to decrease to HKD 3.4 billion in FY2025, with a target of under HKD 2 billion for FY2026 [4] - The company maintained a stable total dividend of HKD 0.28 per share, with a dividend payout ratio of 42.5%, reflecting a year-on-year increase of 12.7 percentage points [4] Profit Forecast - The decline in FY2025 performance was primarily due to one-time impairment losses, with net profit forecasts for FY2026 and FY2027 adjusted down to HKD 1.372 billion and HKD 1.387 billion, respectively [4] - The projected net profit for FY2028 is HKD 1.415 billion, corresponding to price-earnings ratios of 7.2, 7.1, and 6.9 times for FY2026, FY2027, and FY2028 [4]

Core Viewpoint - Insurance capital is increasingly active in the capital market, with a significant acceleration in shareholding actions, indicating a strong interest in dividend stocks, particularly in the banking sector and public utilities [1][4]. Group 1: Shareholding Actions - As of July 2, 2025, insurance companies have made 18 shareholding actions, surpassing the total of 20 for the entire year of 2024 and significantly exceeding the 2023 total [1][4]. - Li'an Life announced a shareholding action in Jiangnan Water, increasing its stake from 4.91% to 5.03% after purchasing 1.1 million shares [3]. - Major shareholders like Great Wall Life are also actively buying shares, indicating a trend of increased participation in the market [4]. Group 2: Investment Focus - The focus of insurance capital has shifted towards H-shares and banking stocks, which are favored due to their significant discounts compared to A-shares and high dividend yields above 5% [4][8]. - The stable profitability and low volatility of banking stocks, especially state-owned banks, align with the risk preferences of insurance capital [4][9]. - The regulatory environment has become more favorable, encouraging insurance funds to increase their equity investments, with a reported 34.9 trillion yuan in investment balance as of Q1 2025, a 16.7% year-on-year increase [8]. Group 3: Strategic Implications - Insurance companies are not only focusing on financial returns but also on industrial synergy, as seen in the case of Huaxia Life's investment in Hangzhou Bank to enhance insurance and banking collaboration [5]. - The trend of shareholding actions is expected to continue, with a potential diversification into sectors like public utilities, environmental protection, and transportation, which offer stable cash flows and are less affected by economic cycles [9][10]. - Future investments are likely to prioritize high-dividend, high-capital appreciation potential companies, aligning with the long-term, stable needs of the insurance industry [10].

Investment Rating - The investment rating for China Water Affairs (00855.HK) is "Buy" (maintained) [1] Core Views - The report highlights that the core operational profit is steadily growing, with a cash flow turning point already evident. The decline in FY2025 performance is primarily due to one-time impairment impacts, while the core operational business remains robust [1][7] Financial Performance Summary - For FY2025, the total revenue is projected at HKD 12,200 million, a decrease of 5.12% year-on-year. The net profit attributable to shareholders is expected to be HKD 1,075 million, down 29.92% year-on-year [1][7] - The main business revenue is HKD 11,656 million, reflecting a 9.4% decline year-on-year, mainly due to reduced income from water supply and direct drinking water installation, maintenance, and construction services [1][7] - The report details segment performance: - Urban water supply revenue is HKD 7,498 million, down 9.4% year-on-year, with segment profit slightly up by 0.1% [1] - Direct drinking water revenue is HKD 657 million, down 61.9%, with segment profit down 58.9% [1] - Environmental segment revenue is HKD 1,523 million, up 42.2%, with segment profit increasing by 56.9% [1] - Total construction revenue is HKD 664 million, down 19.7%, with segment profit down 9.3% [1] - Property revenue is HKD 361 million, with segment profit up 16.5% [1] Future Projections - The report forecasts a net profit of HKD 1,372 million for FY2026, HKD 1,387 million for FY2027, and HKD 1,415 million for FY2028, with corresponding P/E ratios of 7.2, 7.1, and 6.9 times [1][7] - Capital expenditures are expected to decrease from HKD 53.3 billion in FY2024 to HKD 34 billion in FY2025, with a target of under HKD 20 billion for FY2026 [1][7] - The dividend per share for FY2025 is projected to remain stable at HKD 0.28, with a payout ratio of 42.5% and a dividend yield of 4.65% [1][7]

Group 1 - The company reported a revenue of approximately 11.657 billion HKD for the fiscal year ending March 31, 2025, representing a year-on-year decline of 9.4% [1] - The net profit for the same period was approximately 1.075 billion HKD, which reflects a significant year-on-year decrease of 29.9% [1]

Group 1 - The company reported a revenue of HKD 11.657 billion and a profit attributable to shareholders of HKD 1.075 billion for the fiscal year ending March 31, 2025, with a basic earnings per share of HKD 0.66 and a proposed final dividend of HKD 0.15 per share [1] - The company is benefiting from a low inflation environment and the acceleration of market-oriented water price adjustments, with cities like Guangzhou and Shenzhen recently implementing water price reform, which is expected to catalyze price increases in other cities [1] - The overall resilience of the water industry is highlighted, with a gradual improvement in profitability and a trend of declining financing costs due to interest rate cuts and reserve requirement ratio reductions [1] Group 2 - The company aims to adhere to its mission of "water as the foundation, benefiting society" by leveraging policy dividends and technological innovations to promote a sustainable development model that combines light and heavy assets [2] - The focus will be on the main track of "quality differentiated water supply," enhancing the synergy between water supply and direct drinking water businesses, and upgrading technology and services to transition from "safe water" to "healthy water" [2] - The company plans to seize opportunities for green and low-carbon transformation, expand the coverage of direct drinking water projects, and create differentiated competitive advantages to foster sustainable growth and meet public demand [2]

（於開曼群島註冊成立並遷冊往百慕達之有限公司） （股份代號：855） 2.1 提名委員會成員（「成員」）由董事會委任，須由不少於三(3)名成員組成。 3. 責任 提名委員會之職能為向董事會就董事委任提出建議，以確保所有提名均在公 平及具透明度的情況下進行。 4. 職權 提名委員會獲董事會授權，對其職權範圍內之任何活動進行調查，本公司全 體僱員亦獲指示要與提名委員會成員合作，以便調查。提名委員會獲董事會 授權，如有需要可尋求法律或其他獨立專業意見，以協助提名委員會，費用 由本公司支付。並可獲本公司提供充足資源，以履行其職責。 * 僅供識別 1 提名委員會職權範圍 1. 組成 本公司董事會（「董事會」）成立及任命一個提名委員會（「提名委員會」），其 職權、責任及具體職責詳述如下。 2. 成員 (a) 至少每年檢討董事會的架構、人數及成員多元化（包括但不限於性別、 年齡、文化及教育背景、種族、專業經驗、技能、知識及服務任期方面）; 協助董事會編製董事會技能表，並就任何為配合本公司的企業策略而 擬對董事會作出的變動提出建議； (b) 物色具備合適資格可擔任董事的人士，並挑選提名有關人士出任董事 或就此向董事會提供意見 ...

免責聲明 | 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公告 | | | 發行人名稱 | 中國水務集團有限公司 | | 股份代號 | 00855 | | 多櫃檯股份代號及貨幣 | 不適用 | | 相關股份代號及名稱 | 不適用 | | 公告標題 | 截至2025年3月31日止年度的末期股息 | | 公告日期 | 2025年6月30日 | | 公告狀態 | 新公告 | | 股息信息 | | | 股息類型 | 末期 | | 股息性質 | 普通股息 | | 財政年末 | 2025年3月31日 | | 宣派股息的報告期末 | 2025年3月31日 | | 宣派股息 | 每 股 0.15 HKD | | 股東批准日期 | 2025年9月19日 | | 香港過戶登記處相關信息 | | | 派息金額及公司預設派發貨幣 | 每 股 0.15 HKD | | 匯率 | 1 HKD : 1 HKD | | 除淨 ...

[Financial Highlights](index=1&type=section&id=financial_highlights) [Financial Summary](index=1&type=section&id=financial_summary) The Group's total revenue decreased by 9.4% to HKD 11.66 billion, primarily due to declines in construction services, resulting in a 29.9% drop in net profit attributable to owners of the company to HKD 1.07 billion Financial Summary | Metric | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | **Total Revenue** | **11,655.6 Million HKD** | **12,858.5 Million HKD** | **(9.4)** | | - Piped Drinking Water Supply and Construction Services | 219.8 Million HKD | 1,274.6 Million HKD | (82.8) | | - Urban Water Supply and Construction Services | 2,832.8 Million HKD | 3,927.6 Million HKD | (27.9) | | - Wastewater Treatment and Drainage Operation Services | 641.4 Million HKD | 377.4 Million HKD | 69.9 | | **Segment Profit** | | | | | - Piped Drinking Water Supply | 243.2 Million HKD | 591.7 Million HKD | (58.9) | | - Environmental Protection | 555.8 Million HKD | 354.2 Million HKD | 56.9 | | **Profit Attributable to Owners of the Company for the Year** | **1,074.7 Million HKD** | **1,533.5 Million HKD** | **(29.9)** | | **Earnings Per Share - Basic** | **0.66 HKD** | **0.94 HKD** | **(29.8)** | | **Final Dividend Per Share** | **15 HK cents** | **15 HK cents** | **–** | [Consolidated Financial Statements](index=2&type=section&id=consolidated_financial_statements) [Consolidated Statement of Profit or Loss](index=2&type=section&id=income_statement) Revenue decreased by 9.4% to HKD 11.66 billion, with gross profit down 7.8% and operating profit declining 12.9% due to a significant increase in expected credit losses, leading to a 29.9% drop in net profit attributable to owners of the company Consolidated Statement of Profit or Loss | Item | 2025 (HKD Thousands) | 2024 (HKD Thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | 11,655,565 | 12,858,515 | -9.4% | | Gross Profit | 4,404,978 | 4,775,964 | -7.8% | | Profit from Operations | 3,527,513 | 4,050,171 | -12.9% | | Profit Before Income Tax | 2,750,145 | 3,369,658 | -18.4% | | Profit Attributable to Owners of the Company | 1,074,663 | 1,533,543 | -29.9% | | Basic Earnings Per Share | 0.66 HKD | 0.94 HKD | -29.8% | - The expected credit loss provision significantly increased to **HKD 498 million** this year, compared to only **HKD 10 million** in the prior year, significantly impacting operating profit[3](index=3&type=chunk) [Consolidated Statement of Financial Position](index=5&type=section&id=balance_sheet) As of March 31, 2025, total assets reached HKD 65.89 billion and net assets HKD 21.87 billion, with notable net current liabilities of HKD 3.79 billion indicating short-term liquidity pressure Consolidated Statement of Financial Position | Item | March 31, 2025 (HKD Thousands) | March 31, 2024 (HKD Thousands) | | :--- | :--- | :--- | | **Total Assets** | **65,891,643** | **63,242,070** | | Non-current Assets | 48,271,896 | 46,366,408 | | Current Assets | 17,619,747 | 16,875,662 | | **Total Liabilities** | **44,018,957** | **41,789,528** | | Current Liabilities | 21,409,424 | 20,747,409 | | Non-current Liabilities | 22,609,533 | 21,042,119 | | **Net Current Liabilities** | **(3,789,677)** | **(3,871,747)** | | **Net Assets** | **21,872,686** | **21,452,542** | - The Group faces net current liabilities of approximately **HKD 3.79 billion**, indicating short-term liabilities exceed short-term assets and posing liquidity risk, which management addresses through strategic investments, new financing, and enhanced collection management[8](index=8&type=chunk) [Summary of Notes to Financial Statements](index=7&type=section&id=notes_to_financials) Financial statements are prepared on a going concern basis, supported by strategic investments and financing, with revenue primarily from urban water supply and construction services across five identified segments in China - To address liquidity pressure, the company secured an equity investment of **RMB 1.5 billion** from Taikang Asset, with **RMB 1.3 billion** received in May 2025 for debt repayment and working capital replenishment[8](index=8&type=chunk)[34](index=34&type=chunk) - As of March 31, 2025, the Group held approximately **HKD 2.71 billion** in undrawn committed bank facilities, secured credit facility letters of intent for approximately **HKD 8.14 billion** from multiple banks, and obtained approval to issue **RMB 3 billion** in Panda Bonds[9](index=9&type=chunk) - The Group has identified five principal operating segments: Urban Water Supply, Piped Drinking Water Supply, Environmental Protection, General Contracting, and Property Development and Investment[20](index=20&type=chunk) [Management Discussion and Analysis](index=19&type=section&id=management_discussion_and_analysis) [Business Review and Segment Performance](index=20&type=section&id=business_review) Total revenue decreased by 9.4% due to strategic optimization and reduced lower-return construction projects, while environmental business showed strong growth, offsetting declines in piped drinking water and stable urban water supply profits - The Group proactively optimized its development strategy, focusing on project returns and prioritizing resource allocation to high-return projects, leading to a slowdown in construction business volume and a decrease in related construction revenue[39](index=39&type=chunk) Business Segment Performance | Business Segment | Revenue (Million HKD) | Y-o-Y Change | Profit (Million HKD) | Y-o-Y Change | Summary | | :--- | :--- | :--- | :--- | :--- | :--- | | Urban Water Supply | 7,498.1 | -9.4% | 2,492.9 | +0.1% | Reduced construction projects, but effective cost control maintained stable profit | | Piped Drinking Water Supply | 656.8 | -61.9% | 243.2 | -58.9% | Overall significant decrease in installation and construction projects | | Environmental Protection | 1,523.5 | +42.2% | 555.8 | +56.9% | New wastewater treatment projects led to increased operating service revenue | | General Contracting | 664.4 | -19.7% | 553.6 | -9.3% | Reduced construction projects for water supply | | Property | 361.3 | +74.1% | 47.8 | +16.5% | Benefited from fair value gains on investment properties, partially offset by property write-downs and declining profit margins | [Liquidity and Financial Resources](index=23&type=section&id=liquidity_and_financial_resources) Despite net current liabilities of HKD 3.79 billion, the Group maintains strong liquidity with HKD 5.45 billion in cash and deposits, a 66.6% gearing ratio, and HKD 13.35 billion in undrawn facilities Liquidity and Financial Resources | Metric | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Total Cash and Deposits | Approx. 5.45 Billion HKD | Approx. 5.55 Billion HKD | | Gearing Ratio | 66.6% | 66.1% | | Net Current Liabilities | 3.79 Billion HKD | 3.87 Billion HKD | | Total Outstanding Borrowings | 25.19 Billion HKD | 24.85 Billion HKD | | Total Undrawn Facilities | 13.35 Billion HKD | 9.86 Billion HKD | - The Group is improving its debt structure by refinancing short-term loans into long-term loans and actively expanding financing channels to gradually enhance its liquidity position[51](index=51&type=chunk) [Future Outlook](index=22&type=section&id=future_outlook) The Group is optimistic about the water industry, anticipating benefits from national policies and water price reforms, while focusing on 'differentiated water supply' and technological innovation to enhance quality and consolidate leadership - The company believes that the initiation of water price adjustment procedures in many parts of the country, especially the implementation of water price reform plans in Guangzhou and Shenzhen, will catalyze profit improvement in the water industry[47](index=47&type=chunk) - The core strategy is to deeply cultivate the 'differentiated water supply' main track, strengthen the synergistic development of water supply and direct drinking water as dual core businesses, and promote a quality leap from 'safe water' to 'healthy water' through technological upgrades[48](index=48&type=chunk) - In January 2025, the company successfully issued **RMB 1 billion** in secured blue-green bonds, used for repaying offshore debt and supporting projects under the blue-green financing framework[46](index=46&type=chunk) [Corporate Actions and Corporate Governance](index=19&type=section&id=corporate_actions_and_governance) The company proposes a final dividend of HKD 0.15 per share, repurchased 4.774 million shares, and largely complied with corporate governance codes, though some deviations exist regarding Chairman and CEO roles - The Board recommends a final dividend of **HKD 0.15** per share, consistent with the prior year, demonstrating confidence in the company's future development[36](index=36&type=chunk) - For the year ended March 31, 2025, the company repurchased **4,774,000** shares on the Stock Exchange for a total consideration of approximately **HKD 27.515 million**, holding the repurchased shares as treasury stock[52](index=52&type=chunk) - The company has deviations from corporate governance code provisions, including the Chairman also serving as Chief Executive Officer and the Chairman not being subject to retirement by rotation[57](index=57&type=chunk)[58](index=58&type=chunk)

（於開曼群島註冊成立並遷冊往百慕達之有限公司） （股份代號：855） 更改董事會會議日期 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佈之內容概不負責， 對其準確性或完整性亦不發表任何聲明，並明確表示概不就因本公佈全部或任何 部分內容而產生或因倚賴該等內容而引致之任何損失承擔任何責任。 於本公佈日期，董事會包括四名執行董事，即段傳良先生、丁斌小姐、李中先生 及段林楠先生；四名非執行董事，即李浩先生、白力先生、王小沁小姐及劉玉杰 小姐；及四名獨立非執行董事，即周錦榮先生、邵梓銘先生、何萍小姐及肖喆先生。 * 僅供識別 承董事會命 中國水務集團有限公司 主席 段傳良 香港，二零二五年六月二十七日 茲提述中國水務集團有限公司（「本公司」）日期為二零二五年六月六日之公佈，內 容有關本公司董事會（「董事會」）謹定於二零二五年六月二十七日（星期五）舉行董 事會會議，以考慮及批准本公司及其附屬公司截至二零二五年三月三十一日止年 度之全年業績（「二零二五年財政年度全年業績」）公佈及其刊發，並考慮建議派發 末期股息（如有），以及處理任何其他事項。 由於需要更多時間完成二零二五年財政年度全年業績之內容，董事會茲宣佈董事 ...