Investment Rating - The report assigns a "Buy" rating to the company [11]. Core Viewpoints - Beikong Water Group is a national leader in water services with stable dividend guarantees. The company is expected to achieve steady growth in its water supply and sewage treatment business as capacity utilization increases. The pressure on growth in the water environment management construction service has gradually been released. The company has turned positive in free cash flow since 2022, and the dividend per share has not been less than HKD 0.157 since 2021, indicating a strong dividend capability [4][11]. Summary by Sections Company Overview - Beikong Water Group, established in 2008, operates in sewage and reclaimed water treatment, water supply services, water environment management construction, technical and consulting services, equipment sales, and urban resource services. The company is actively expanding its light asset operation model, with engineering business continuously shrinking, leading to a decrease in gross profit contribution [7][19]. Shareholding Structure - As of the end of 2024, Beijing Enterprises holds 41.1% of the company's shares, with the actual controller being the Beijing State-owned Assets Supervision and Administration Commission. Other significant shareholders include China Three Gorges Corporation and its subsidiaries [7][35]. Highlights - The company has passed the peak of project construction, with capital expenditure expected to decrease to HKD 41.1 billion in 2024, down by HKD 28.9 billion year-on-year. The dividend per share is projected to yield a dividend rate of 6.22% in 2024 [7][40]. Water Services Sector - The demand for water supply and sewage treatment is expected to grow steadily, with a projected CAGR of 0.37% and 1.2% from 2025 to 2027. The company’s market share in water supply and sewage treatment is 1.8% and 8.2%, respectively, as of 2023. The company’s operational capacity is expected to reach 33.84 million tons per day by the end of 2024 [8][11]. Financial Analysis - The company has experienced profit fluctuations over the past three years due to factors such as the sale of joint ventures and impairment provisions. However, the increase in operational proportion is expected to enhance future earnings stability. As of the end of 2024, the cautious estimate of accounts receivable is HKD 20.85 billion, with 75.8% of service concession receivables due within one year [10][11]. Profit Forecast - The company is expected to achieve a net profit attributable to shareholders of HKD 16.6 billion, HKD 17.0 billion, and HKD 17.1 billion from 2025 to 2027, with dividends projected to grow by 3% annually from 2024 levels [11].
北控水务集团（00371）：全国性水务龙头，分红保障稳健收益