Financial Performance - Total revenue for the year 2024 was HKD 12,858,515, a decrease of 9.4% from HKD 14,194,953 in 2023[7]. - Gross profit for 2024 was HKD 4,775,964, down 10.7% from HKD 5,346,297 in the previous year[7]. - Net profit attributable to shareholders for 2024 was HKD 1,533,543, reflecting a decline of 17.4% compared to HKD 1,856,786 in 2023[7]. - Basic and diluted earnings per share for 2024 were HKD 0.94, down 17.5% from HKD 1.14 in 2023[7]. - Operating profit for the year was HKD 4,050,171, a decline of 9.8% compared to HKD 4,489,728 in the previous year[117]. - The company reported a total comprehensive income of HKD 856,443 for 2024, down from HKD 1,380,119 in 2023, a decrease of 37.9%[118]. - The company reported a profit of HKD 1,856,786 thousand for the year, compared to HKD 1,231,559 thousand in the previous year, showing a significant increase of approximately 50.7%[121]. - The company reported a net loss of HKD 1,189,261 in comprehensive income for the year, compared to a loss of HKD 116,143 in the previous year[122]. Assets and Liabilities - Total assets increased by 3.4% to HKD 63,242,070 in 2024 from HKD 61,164,288 in 2023[7]. - Total liabilities rose by 4.5% to HKD 41,789,528 in 2024 compared to HKD 39,992,154 in the previous year[7]. - The company's total outstanding borrowings increased to HKD 24,850,300,000, with 71.0% of the borrowings at floating rates[21]. - The capital debt ratio as of March 31, 2024, was 66.1%, up from 65.4% the previous year[21]. - The company's borrowings increased to HKD 17,878,737 thousand in 2024, compared to HKD 15,607,292 thousand in 2023, reflecting a rise of approximately 14.5%[120]. - The total liabilities increased to HKD 36,950,641,000 in 2024 from HKD 35,400,088,000 in 2023, reflecting an increase of approximately 4.4%[183]. Segment Performance - The "pipeline drinking water supply" segment recorded significant growth, with total revenue increasing by 31.4% from HKD 1,310,100,000 to HKD 1,721,900,000[12]. - The urban water supply segment's revenue was HKD 8,276,400,000, a decrease of 5.2% from HKD 8,729,200,000[15]. - The environmental segment revenue decreased by 24.0% to HKD 1,071,500,000, with profit down 24.4% to HKD 354,200,000 due to the completion of several ongoing wastewater treatment projects[17]. - General contracting construction segment revenue fell significantly by 31.0% to HKD 826,800,000, with profit decreasing by 23.4% to HKD 610,500,000, primarily due to a reduction in external water supply and wastewater treatment projects[17]. Cash Flow and Financing - As of March 31, 2024, the company maintained a cash and cash equivalents total of approximately HKD 5,550,200,000, down from HKD 7,499,100,000 the previous year[21]. - The company continues to enhance cooperation with existing banks and expand financing channels to improve liquidity and debt structure[22]. - Cash flow from investment activities for 2024 was a net outflow of HKD 5,433,838,000, compared to a net outflow of HKD 4,112,341,000 in 2023, indicating an increase in cash outflow of approximately 32%[124]. - The company reported a significant increase in cash generated from financing activities, with a net inflow of HKD 605,348,000 in 2024, down from HKD 1,866,665,000 in 2023, reflecting a decrease of approximately 68%[125]. Corporate Governance - The company has maintained compliance with the Hong Kong Stock Exchange's Corporate Governance Code, with some deviations noted[34]. - The board believes that the current structure of separating the roles of Chairman and CEO does not impair the balance of power between the board and management[34]. - The company has a strong commitment to corporate governance standards to enhance shareholder value[34]. - The company has established a corporate governance policy to guide the effective application of governance principles[34]. - The company has independent non-executive directors who are responsible for understanding shareholder opinions[34]. Sustainability and Environmental Initiatives - The company is committed to sustainable development and aims to positively impact stakeholders while promoting an inclusive environment[36]. - The company has formulated a "Carbon Peak, Carbon Neutrality" implementation plan to accelerate its transition towards green sustainable development[36]. - The company is committed to environmental sustainability, focusing on energy conservation and reducing emissions as part of its core management practices[69]. - The company will publish an annual environmental, social, and governance report to keep stakeholders informed about its sustainability performance[69]. Risk Management - The company has implemented a centralized risk management policy to mitigate potential adverse impacts from financial market unpredictability[161]. - The company has identified key operational risks, including operational, liquidity, and legal compliance risks, and has implemented measures to manage these risks[64][65][66][67]. - The company is committed to continuous improvement of its risk management and internal control systems based on findings from internal audits[52]. Shareholder Information - The board proposed a final dividend of HKD 0.15 per share, bringing the total dividend for the year to HKD 0.28 per share[12]. - The company has adopted a dividend policy aiming for a payout ratio of at least 30% of basic earnings per share for each financial year[58]. - The final dividend will be distributed on November 15, 2024, pending shareholder approval at the annual general meeting on September 6, 2024[61]. Related Party Transactions - The group engaged in related party transactions with 江西銀麗, with a total transaction amount of approximately HKD 43,579,000 (around RMB 39,657,000) during the year[97]. - The independent non-executive directors confirmed that the related party transactions were conducted in the ordinary course of business and on normal commercial terms[98]. Audit and Compliance - The independent auditor's report confirms that the financial statements present a true and fair view of the group's financial performance and cash flows[102]. - The audit committee has conducted two meetings to assess the company's performance and review environmental, social, and governance matters[40]. - The audit committee, composed entirely of independent non-executive directors, has reviewed the company's financial reporting processes and risk management systems[40].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 6.58, representing a potential upside of 39.3% from the current price of HKD 4.72 [3][5]. Core Insights - The company's net profit for the fiscal year 2023/24 is expected to decline by 12.6%, with total revenue decreasing by 9.4% to HKD 12.86 billion. Excluding currency fluctuations, the revenue decline is 4.1% [3][4]. - Despite the decline in overall performance, core businesses such as water supply, direct drinking water, and environmental services remain robust, indicating a pathway to high-quality development [3][6]. - The direct drinking water segment saw a revenue increase of 31.4% to HKD 1.72 billion, now accounting for 13.2% of total revenue, with over 3,000 new projects added during the period [3][4]. - The water supply business experienced a slight revenue decline of 5.8% to HKD 8.90 billion, but the company anticipates significant revenue growth from over 20 water price adjustment projects currently in progress [3][6]. - The environmental segment's revenue decreased by 35% to HKD 1.03 billion, primarily due to the completion of large projects, but is expected to rebound with the upcoming production of the Mobil project [3][4]. Financial Summary - For the fiscal year 2023/24, the company reported a net profit of HKD 2.59 billion, down 16.1% year-on-year, with a core net profit decline of 4.0% when excluding currency impacts [3][4]. - The EBITDA margin improved slightly by 0.1 percentage points to 40.1%, indicating operational efficiency despite revenue challenges [3][4]. - The company plans to maintain a dividend payout ratio of 30%, with a proposed final dividend of HKD 0.15 per share [3][4]. Future Projections - The company is projected to achieve net profits of HKD 1.70 billion, HKD 1.93 billion, and HKD 2.12 billion over the next three fiscal years [3][4]. - The anticipated reduction in capital expenditures due to the commencement of trial production for approximately 800,000 tons of capacity in the water supply and environmental sectors is expected to improve the financial structure and cash flow [3][6].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company reported a significant increase in operational revenue from direct drinking water, up 73%, with expectations for accelerated water price adjustments [1] - For FY2024, total revenue was HKD 12,859 million, a year-on-year decrease of 9.4%, while net profit attributable to shareholders was HKD 1,534 million, down 17.4% [2][6] - The direct drinking water revenue accounted for 13.4% of total revenue, reflecting a growth of 4.2 percentage points [2][6] Summary by Sections Financial Performance - FY2024 total revenue was HKD 12,859 million, down 9.4% year-on-year, while net profit was HKD 1,534 million, down 17.4% [2] - The company maintained a dividend payout ratio of 30%, distributing HKD 0.28 per share [2] - The direct drinking water segment saw revenue growth of 72.5%, with operational revenue reaching HKD 293 million [2][6] Segment Analysis - Urban water supply revenue was HKD 8,276 million, down 5.2%, with segment profit decreasing by 12.2% [2] - Pipeline direct drinking water revenue was HKD 1,722 million, up 31.4%, with segment profit increasing by 17.3% [2] - Environmental services revenue fell by 24.0% to HKD 1,072 million, with segment profit also declining by 24.4% [2] - Total construction revenue decreased by 31.0% to HKD 827 million, with segment profit down 23.4% [2] Future Outlook - The company expects net profit for FY2025 to be HKD 1,626 million, and for FY2026 to be HKD 1,789 million, reflecting adjustments due to currency fluctuations and declining construction activities [2][6] - The projected net profit for FY2027 is HKD 1,989 million, corresponding to a P/E ratio of 5.0 for FY2025, 4.6 for FY2026, and 4.1 for FY2027 [2][6]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 6.30, reflecting a potential upside of 21.9% based on the FY25 earnings multiple of 6.5 times [2][3]. Core Insights - The company's FY24 results fell short of expectations, with a 17.4% year-on-year decline in net profit to HKD 1.534 billion, primarily due to a 1.3% drop in water operation revenue and a significant decrease in high-margin connection fee income [2][3]. - The company has initiated price adjustment applications for approximately one-third of its water supply projects, which could take effect by FY26 if approved [2]. - The pipeline drinking water business showed a total revenue increase of 31.4% year-on-year, indicating a cautious but positive growth trajectory [2]. Financial Performance Summary - FY24 revenue was HKD 12.859 billion, down 9.4% from FY23, with a projected revenue of HKD 13.217 billion for FY25 and HKD 14.292 billion for FY26 [5][6]. - The net profit for FY24 was HKD 1.534 billion, with forecasts of HKD 1.582 billion for FY25 and HKD 1.732 billion for FY26, reflecting a recovery trend [5][6]. - Earnings per share (EPS) for FY24 was HKD 0.94, with projections of HKD 0.97 for FY25 and HKD 1.06 for FY26 [5][6]. Market Position and Shareholder Information - The company has a market capitalization of HKD 8,439.11 million, with a circulating share ratio of 47.12% and a 52-week price range of HKD 3.76 to HKD 6.79 [1][2]. - Major shareholder Duan Chuanliang holds a 28.86% stake in the company [1].

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） 截至二零二四年三月三十一日止年度之業績公佈 | --- | --- | --- | --- | --- | --- | |----------------|-------|--------------------------------------------------------------|---------------------------|---------------------------|---------------------| | | | 截至三月三十一日止年度之財務摘要 | 二零二四年 \n港幣百萬元 | 二零二三年 \n港幣百萬元 | 變動 \n% \n附註 (1) | | 收益 | | 總計 | 12,858.5 | 14,195.0 | (9.4) | | | | 管道直飲水供應經營及管道直飲水供應 | ...

Investment Rating - The report initiates coverage on China Water Affairs Group with an "Overweight" rating [2][31] Core Views - China Water Affairs is a leading integrated water operator in China, with a dual-drive business model of "water supply + direct drinking water" [2][8] - The company's direct drinking water business is expected to achieve above-expectation growth, driven by advanced water purification technology, rich customer resources, and strong brand and service capabilities [2] - The water supply business is stable, with clear trends of increasing volume and price [2][24] - The company has strong cash flow and stable dividend payouts, with a dividend payout ratio maintained at 29-30% over the past three years [2][29] Business Overview Water Supply Business - China Water Affairs is one of the top 10 urban water supply operators in China, with a total designed water supply capacity of 1,410 million tons per day and a water supply pipeline network of approximately 148,000 kilometers, covering a population of over 30 million [8] - The company focuses on rapidly growing third- and fourth-tier cities, implementing integrated urban-rural water supply and drainage systems and actively developing direct drinking water supply services [8] - The water supply business is expected to benefit from China's new cycle of water price increases, with a clear trend of increasing volume and price [24][27] Direct Drinking Water Business - The company began expanding its direct drinking water business in 2015 and currently operates over 3,600 direct drinking water projects nationwide, serving approximately 4.5 million people [13] - In 2022, the company ranked first in China in terms of direct drinking water sales revenue, with a market share of 7.3% [13] - The direct drinking water business revenue grew by 89% year-on-year in FY2023, reaching HKD 1.31 billion, with a gross margin of 44.1% [13] - The direct drinking water market in China is expected to grow rapidly, with the market size projected to reach RMB 14.6 billion by 2027 [20][21] Financial Performance - The company's revenue and net profit have shown steady growth, with a compound annual growth rate (CAGR) of 20% and 26%, respectively, from FY2014 to FY2023 [9] - The company's operating cash flow in FY2023 was HKD 4.851 billion, with a CAGR of 19% from FY2014 to FY2023 [29] - The dividend payout ratio has been maintained at 29-30% over the past three years, indicating stable dividend payments [29] Shareholder Structure - The top three shareholders are ORIX Corporation (17.84%), Duan Chuanliang (15.50%), and Asset Full Resources Limited (13.36%), with Duan Chuanliang being the actual controller of the company, holding 28.86% of the shares [11][12] Market Outlook - The direct drinking water market in China is still in its early stages, with significant growth potential driven by rising living standards, policy support, and consumer preference for convenient and environmentally friendly drinking water solutions [17][21] - The water supply business is expected to benefit from China's new cycle of water price increases, with a clear trend of increasing volume and price [24][27] Valuation and Forecast - The report forecasts the company's net profit for FY2024-2026 to be HKD 1.881 billion, HKD 1.973 billion, and HKD 2.062 billion, respectively, with corresponding EPS of HKD 1.15, HKD 1.21, and HKD 1.26 [2][31]

Financial Performance - Revenue for the six months ended September 30, 2023, was HKD 6,845,957, representing a 0.9% increase from HKD 6,785,206 in the same period last year[12]. - Gross profit for the same period was HKD 2,523,900, up 0.6% from HKD 2,508,330 year-on-year[12]. - Profit attributable to owners of the company decreased by 14.9% to HKD 825,896 from HKD 970,357 in the previous year[12]. - Basic and diluted earnings per share were both HKD 50.60, down 14.9% from HKD 59.45[12]. - The profit for the six months ended September 30, 2023, was HKD 1,377,784, a decrease of 8.8% compared to HKD 1,510,416 for the same period in 2022[22]. - The group reported a net other income of HKD 192,331 for the six months ended September 30, 2023, down from HKD 247,787 in the same period last year[43]. - Segment profit for the period was HKD 2,205,328,000, a decrease from HKD 2,172,721,000 in the previous year, indicating a decline of about 1.49%[49]. - Basic earnings per share for the period were HKD 0.51, down from HKD 0.59 in the same period last year, a decline of about 13.56%[55]. Assets and Liabilities - Total assets as of September 30, 2023, were HKD 60,277,616, a decrease of 1.4% from HKD 61,164,288[13]. - Total liabilities were HKD 39,933,237, showing a slight decrease of 0.1% from HKD 39,992,154[13]. - Net assets decreased by 3.9% to HKD 20,344,379 from HKD 21,172,134[13]. - Current liabilities increased to HKD 20,914,623 from HKD 21,178,405, indicating a reduction in financial obligations[25]. - The company's total liabilities as of September 30, 2023, reached HKD 16,096,095,000, compared to HKD 15,607,292,000 as of March 31, 2023, indicating a growth of 3.1%[67]. - The company's total borrowings as of September 30, 2023, were HKD 22,929,147,000, a decrease from HKD 23,627,832,000 as of March 31, 2023, representing a decline of 3%[67]. Dividends and Shareholder Returns - The company declared an interim dividend of HKD 0.13 per share, down 18.8% from HKD 0.16 in the previous year[12]. - The interim dividend declared was HKD 0.13 per share, compared to HKD 0.16 per share in the previous year, representing a reduction of 18.75%[56]. Operational Highlights - The company serves an estimated population of over 30 million through its urban water supply business[10]. - The group reported a significant increase in user data, with a total of 11,968,212 registered users as of the reporting period[31]. - The group is focused on expanding its market presence and exploring new strategies for growth[31]. - The group has plans for new product development and technological advancements to enhance service offerings[31]. Segment Performance - Revenue from urban water supply operations was HKD 1,614,677, while the revenue from pipeline drinking water supply operations was HKD 124,662, showing a decline from HKD 1,688,473 and HKD 87,307 respectively in the previous year[43]. - The revenue from the urban water supply segment was HKD 4,210,000,000, a slight decrease of 1.2% compared to HKD 4,260,700,000 in the previous year[84]. - The revenue from the pipeline drinking water supply segment surged to HKD 1,027,400,000, representing a significant increase of 160.6% from HKD 394,300,000 in the previous year[85]. - The revenue from the environmental protection segment increased to HKD 637,400,000, reflecting a notable growth of 19.9% from HKD 531,800,000 in the previous year[86]. - The revenue from the general contracting construction segment decreased to HKD 517,500,000, a decline of 25.5% from HKD 695,100,000 in the previous year[87]. - The property segment recorded revenue of HKD 85,900,000, a drastic decrease of 72.7% from HKD 373,400,000 in the previous year[88]. Financing and Investments - The group has unused loan facilities and offers amounting to approximately HKD 8,254,000,000 as of September 30, 2023[33]. - The company entered into a financing agreement for a syndicated loan of $250,000,000 with a maximum option of $250,000,000, with approximately $358,000,000 drawn down as of September 30, 2023[94]. - The company invested HKD 204,302,000 in property, plant, and equipment during the period, compared to HKD 321,410,000 in the previous year, a decrease of approximately 36.38%[57]. Governance and Compliance - The company has adhered to all applicable provisions of the Corporate Governance Code as of September 30, 2023, with deviations noted in sections A.2.1, A.4.2, and A.6.7[105]. - The board believes that the current structure, where the roles of Chairman and CEO are not separated, does not impair the balance of power and responsibility between the board and management[105]. - The audit committee, composed of four independent non-executive directors, reviewed the accounting principles and practices adopted by the group[108].

Financial Performance - Total revenue for the six months ended September 30, 2023, was HKD 6,846.0 million, a 0.9% increase from HKD 6,785.2 million in the same period last year[3] - The segment profit for the drinking water supply business increased significantly to HKD 335.3 million, compared to HKD 121.9 million, reflecting a growth of 175.1%[3] - The company reported a net profit attributable to shareholders of HKD 825.9 million, down 14.9% from HKD 970.4 million in the previous year[3] - Basic earnings per share decreased to HKD 50.60 cents from HKD 59.45 cents, representing a decline of 14.9%[3] - The gross profit for the period was HKD 2,523.9 million, slightly up from HKD 2,508.3 million, indicating a stable gross margin[7] - Operating profit for the business was HKD 2,126.9 million, a slight decrease from HKD 2,150.9 million year-on-year[7] - The company experienced a decrease in other income, which fell to HKD 192.3 million from HKD 247.8 million[7] - The total comprehensive loss for the period amounted to HKD 346.5 million, compared to a loss of HKD 215.4 million in the previous year[9] - The company reported a net profit of HKD 1,510,416 for the period, compared to HKD 1,377,784 in the previous year, reflecting an increase of 9.59%[19] - The total income tax expense decreased from HKD 496,122,000 in 2022 to HKD 414,345,000 in 2023, reflecting a reduction of approximately 16.4%[24] Revenue Breakdown - Revenue from urban water supply operations was HKD 1,614,677, down from HKD 1,688,473, a decrease of 4.37%[15] - Revenue from pipeline drinking water supply operations increased to HKD 124,662, up from HKD 87,307, a growth of 42.73%[15] - The segment profit for urban water supply was HKD 1,413,025, while the total segment profit for all divisions was HKD 2,205,328[19] - The "Pipeline Drinking Water Supply" segment revenue surged from HKD 394,300,000 to HKD 1,027,400,000, marking a significant increase of 160.6%[33] - The "Urban Water Supply" segment revenue slightly decreased from HKD 4,260,700,000 to HKD 4,210,000,000, a decline of 1.2%[32] - The profit for the "Urban Water Supply" segment fell from HKD 1,413,000,000 to HKD 1,204,800,000, a decrease of 14.7%[32] - The environmental segment reported revenue of HKD 637,400,000, a significant increase of 19.9% compared to HKD 531,800,000 in the previous year, with profit rising by 35.1% to HKD 250,800,000 from HKD 185,600,000[34] - The general contracting construction segment experienced a revenue decline of 25.5%, totaling HKD 517,500,000, down from HKD 695,100,000, with profit decreasing by 19.1% to HKD 359,800,000 from HKD 444,500,000[35] - The property segment's revenue fell sharply by 72.7% to HKD 85,900,000 from HKD 373,400,000, with total profit dropping to HKD 15,300,000 from HKD 56,200,000[36] Financial Position - As of September 30, 2023, total assets amounted to HKD 43,112,139,000, a slight decrease from HKD 43,278,018,000 as of March 31, 2023[10] - Current liabilities exceeded current assets by HKD 3,749,146,000 as of September 30, 2023, compared to HKD 3,292,135,000 as of March 31, 2023[13] - The company's cash and cash equivalents decreased to HKD 5,433,180,000 from HKD 6,984,821,000[10] - Non-current liabilities increased to HKD 19,018,614,000 from HKD 18,813,749,000[11] - The net asset value as of September 30, 2023, was HKD 20,344,379,000, down from HKD 21,172,134,000[11] - The company reported a decrease in goodwill to HKD 1,368,934,000 from HKD 1,419,442,000[10] - The total liabilities as of September 30, 2023, were HKD 20,914,623,000, compared to HKD 21,178,405,000 as of March 31, 2023[11] - The company had undrawn loan facilities and offers amounting to approximately HKD 8,254,000,000 as of September 30, 2023[13] - The company’s total outstanding borrowings amounted to HKD 22,929,100,000, a decrease from HKD 23,627,800,000, primarily due to debt repayments[39] Dividends and Shareholder Returns - The board has proposed an interim dividend of HKD 0.13 per share for the six months ended September 30, 2023[5] - Basic earnings per share for the period were HKD 0.51, down from HKD 0.59 in the previous year, indicating a decrease of 13.6%[25] - Interim dividend declared is HKD 0.13 per share, compared to HKD 0.16 per share in the previous year, representing a decrease of 18.8%[29] Debt and Financing - The company has drawn approximately USD 358 million under a syndicated loan facility, which will be used for repayment and refinancing of certain bank borrowings[5] - The total borrowing costs increased to HKD 376,570,000 in 2023 from HKD 270,684,000 in 2022, reflecting an increase of 39.1%[6] - The company is continuously seeking new debt financing and bank loans to manage its financial resources[13] - The company has adopted a conservative treasury policy, regularly reviewing liquidity and financing needs[41] Corporate Governance - The company is committed to maintaining high standards of corporate governance to enhance shareholder value[42] - The company has complied with all applicable provisions of the Corporate Governance Code as per the Listing Rules, except for deviations from rules A.2.1, A.4.2, and A.6.7[43] - The board believes that the current structure, where the roles of Chairman and CEO are separated, does not impair the balance of power between the board and management, and supports effective decision-making[43] - The company has confirmed that all directors have fully complied with the standards set out in the Securities Trading Code during the six months ending September 30, 2023[44] - The audit committee, composed of four independent non-executive directors, reviewed the accounting principles and practices adopted by the group and discussed internal controls and financial reporting matters[46] - The interim results announcement has been published on the company's and the Stock Exchange's websites, with the interim report to be sent to shareholders at an appropriate time[47] Employment and Workforce - The company employed approximately 11,600 staff as of September 30, 2023, with compensation based on various factors including experience and performance[40]

Group 1 - The company expressed gratitude to investors for their attention and to the organizers for the arrangement [1] Q&A Session All Questions and Answers Question: Introduction of the company - The company provided a brief overview of its operations and structure [1]

Financial Performance - Total revenue for the year 2023 reached HKD 14,194.95 million, an increase of 9.6% compared to HKD 12,949.83 million in 2022[6] - Gross profit for 2023 was HKD 5,346.30 million, reflecting a growth of 7.7% from HKD 4,962.20 million in the previous year[6] - Net profit attributable to shareholders for 2023 was HKD 1,856.79 million, a slight decrease of 1.9% from HKD 1,893.57 million in 2022[6] - The environmental business reported a revenue increase of 17.5% to HKD 1,750 million in 2023, compared to HKD 1,200 million in 2022[17] - The revenue from the pipeline drinking water supply segment surged by 88.9% to HKD 1,310,100,000, compared to HKD 693,700,000 in the previous year[26] - The profit from the pipeline drinking water supply segment increased significantly by 206.0% to HKD 504,300,000, up from HKD 164,800,000 year-on-year[26] - The total construction segment's external customer revenue rose by 207.9% to HKD 1,198,700,000, up from HKD 389,300,000 year-on-year[28] - The urban water supply segment's revenue decreased by 6.3% to HKD 8,729,200,000, down from HKD 9,316,300,000 in the previous year[25] Assets and Liabilities - The total assets increased by 7.2% to HKD 61,164.29 million in 2023, up from HKD 57,064.44 million in 2022[6] - Total liabilities rose by 9.3% to HKD 39,992.15 million in 2023, compared to HKD 36,581.70 million in the previous year[6] - The net asset value increased by 3.4% to HKD 21,172.13 million in 2023, from HKD 20,482.74 million in 2022[6] - As of March 31, 2023, the group's cash and cash equivalents totaled approximately HKD 7,499,100,000, an increase from HKD 6,529,200,000 as of March 31, 2022[32] - The total outstanding borrowings amounted to HKD 23,627,800,000 as of March 31, 2023, up from HKD 21,863,500,000 as of March 31, 2022[32] - The capital debt ratio as of March 31, 2023, was 65.4%, compared to 64.1% as of March 31, 2022[32] Market Presence and Expansion - The company served an estimated population of over 30 million in its urban water supply business, with a pipeline length of approximately 148,000 kilometers[4] - The direct drinking water supply business served around 4.5 million people, indicating a significant market presence[4] - The company plans to continue expanding its market presence and investing in new technologies to enhance service delivery and operational efficiency[6] - The company aims to expand its services in water supply, sewage treatment, and smart water management across approximately 70 counties, covering over 30 million people[22] - The company anticipates significant growth potential in the water services sector, particularly in pipeline drinking water, due to urbanization and economic growth[22] Corporate Governance and Management - The company has adopted a corporate governance policy to ensure transparency and quality in disclosures, complying with all applicable provisions of the Corporate Governance Code[45] - The board comprises independent non-executive directors with over 30 years of experience in auditing, tax, and financial management, ensuring robust governance[42] - The management team includes individuals with extensive backgrounds in capital markets, corporate governance, and investment management, enhancing the company's strategic capabilities[40] - The company has established three committees: the audit committee, the nomination committee, and the remuneration committee, to enhance governance practices[50] - The audit committee is responsible for ensuring compliance with applicable accounting and reporting regulations, as well as monitoring internal controls[51] Environmental and Social Responsibility - The company is committed to sustainable development, aiming to provide safe and high-quality drinking water while improving the ecological environment[47] - The company has formulated a "carbon peak and carbon neutrality" implementation plan to accelerate its transition towards green sustainable development[47] - The company emphasizes the importance of corporate culture, guided by the core value of "Water as the Foundation, Achieving a Good Society"[47] - The company has a commitment to corporate social responsibility, responding to national calls for environmental protection and sustainable practices[47] Financial Management and Risk - The company has maintained a sufficient and effective risk management and internal control system, as confirmed by the board of directors[66] - The company actively monitors regulatory changes to mitigate legal and compliance risks, ensuring adherence to local laws[81] - The company closely monitors compliance with loan agreements to mitigate liquidity risks, ensuring sufficient cash flow for operational needs[80] - The company has identified and is managing key operational risks through regular assessments and internal audits to ensure effective risk management[79] Shareholder Relations and Dividends - The company proposed a final dividend of HKD 0.18 per share, maintaining a total dividend of HKD 0.34 per share for the year[21] - The company aims for a target dividend payout ratio of at least 30% of basic earnings per share for each fiscal year[73] - The company has established various channels for communication with shareholders to ensure they are informed about the company's latest developments[72] - The company will distribute the proposed final dividend on November 17, 2023, pending shareholder approval at the annual general meeting[77] Audit and Compliance - The independent auditor, PricewaterhouseCoopers, confirmed that the consolidated financial statements fairly present the group's financial position as of March 31, 2023[116] - Key audit matters identified included the accounting treatment of franchise service arrangements and impairment testing of other intangible assets and goodwill[118] - The audit committee, composed entirely of independent non-executive directors, held two meetings in the fiscal year ending March 31, 2023, to review financial performance and risk management systems[51] Employee and Management Structure - The group employed approximately 11,400 staff as of March 31, 2023[34] - The company’s employee compensation policy is based on performance, qualifications, and market data[104] - The gender ratio within the company's workforce, including senior management, is approximately 1.4:1, indicating a commitment to diversity[69] - The company has mechanisms in place for directors to seek independent professional advice when necessary[59]