环保新能源及公用事业：广州上调自来水价，助力全国供水行业

Investment Rating - The industry investment rating is "Buy" based on the potential investment return exceeding 20% [9]. Core Insights - The report highlights a significant increase in water prices in Guangzhou, with residential water rates rising by up to 93.2% [1]. - The adjustment in water pricing is expected to influence other cities, particularly Shenzhen, to follow suit, thereby benefiting the national water supply industry [3]. - The reduction in water consumption thresholds for different pricing tiers effectively increases the price impact for some users, with certain customers facing a price increase of 92.9% [2]. Summary by Sections Water Price Adjustment - Guangzhou's water price increase will see residential rates rise to 2.55, 3.82, and 7.65 RMB per cubic meter for the first, second, and third tiers respectively, with non-residential rates increasing to 4.40 RMB per cubic meter [1]. - The price adjustment process is expected to take about a year, starting from a public hearing scheduled for May 2024 [1]. Impact on the Industry - The price hikes in Guangzhou are indicative of a broader market trend, as other cities like Shanghai have also raised water prices, reflecting a market-oriented policy approach [3]. - The anticipated water price increase in Shenzhen is expected to be expedited by the precedent set by Guangzhou, potentially completing by mid-2026 [3]. Stock Recommendation - The report recommends China Water Affairs (855 HK) as a top pick, projecting a target price of 7.22 HKD, which represents a 23.4% upside and a price-to-earnings ratio of 8.5 times for FY26 [4]. - Although China Water Affairs does not operate in Guangzhou, it stands to benefit from the nationwide trend of increasing water prices [4].