Core Viewpoint - Citi has downgraded the profit forecast for Beijing Enterprises Water Group (00371) for 2026 to 2027 by 9% to 11% due to a decrease in construction and technical service revenue, but raised the target price from HKD 2.85 to HKD 3.05 based on improved free cash flow and rolling forecasts, maintaining a "Buy" rating [1] Group 1 - The company is expected to pay a dividend of HKD 0.166 per share in 2025, representing a year-on-year increase of 3.1%, with a payout ratio of 98% [1] - The forecasted dividend yield for 2026 is 6.1%, which remains attractive [1] - The company's net profit for 2025 is projected to decline by 6.9% to RMB 1.562 billion, primarily due to a decrease in non-cash construction revenue and impairment related to asset disposals [1] Group 2 - The company's revenue for 2025 is expected to decrease by 9.1% to RMB 22.062 billion, with non-cash construction revenue's share dropping from 14.2% to 7.4% [2] - Operating revenue is projected to decline by 1.9% due to the disposal of certain consulting businesses [2] - The gross margin is expected to improve by 1.4 percentage points to 38.5% due to an increase in the share of revenue from wastewater treatment services [2] Group 3 - Management anticipates a 7% decline in total revenue for 2026, with construction and technical service revenues expected to drop by 38% and 35% respectively [2] - Revenue from urban resource services is expected to remain stable, while wastewater treatment and water supply revenues are projected to decrease by 3% [2]
花旗：升北控水务集团(00371)目标价至3.05港元 维持“买入”评级