Investment Rating - Maintains an "Overweight" rating [1][3] Core Views - The company is the leading water treatment industry player in China with the largest capacity scale [1] - The sewage and water supply businesses are growing steadily, with increasing volumes and prices [1] - Capital expenditure is entering a downward cycle, improving cash flow and supporting stable high dividends [1] - The company is expected to undergo a revaluation due to its high dividend characteristics [1] Financial Performance - 2023 revenue reached RMB 24.519 billion, a 14% year-on-year increase [1] - 2023 net profit attributable to shareholders was RMB 1.896 billion, a 60% year-on-year increase [1] - The company changed its financial reporting currency from HKD to RMB starting from January 1, 2023 [1] - The consolidated gross margin in 2023 was 36.7%, a 2.7 percentage point decrease compared to the previous year, mainly due to the consolidation of Beijing Enterprises Urban Resources Group [1] Business Operations - Total water treatment capacity reached 43.96 million tons/day by the end of 2023, including 24.86 million tons/day for sewage, 14.33 million tons/day for water supply, 4.47 million tons/day for recycled water, and 0.30 million tons/day for seawater desalination [1] - In 2023, the company treated 6.03 billion tons of sewage and recycled water, a 4% year-on-year increase [1] - The average contract price for sewage treatment in mainland China was RMB 1.49/ton in 2023, compared to RMB 1.47/ton in 2022 [1] - Water supply volume reached 2.31 billion tons, a 4% year-on-year increase, with an average contract price of RMB 2.15/ton in mainland China, compared to RMB 2.13/ton in 2022 [1] - Capital expenditure in 2023 was RMB 6.83 billion, slightly higher than the RMB 6.30 billion in 2022, mainly due to the recovery from the impact of the pandemic on water plant construction in 2022 [1] Dividend Policy - The total dividend for 2023 was RMB 1.42 billion, a 1.68% year-on-year increase, with a cash dividend payout ratio of 75% [1] - The company has maintained a stable annual dividend of approximately HKD 1.58 billion for three consecutive years from 2021 to 2023 [1] - The static dividend yield for 2023 was 8.83%, highlighting the company's high dividend characteristics [1] Financial Forecasts - The forecasted net profits for 2024-2026 are adjusted to RMB 1.966 billion (-10%), RMB 2.040 billion (-12%), and RMB 2.150 billion, respectively [1] - The corresponding EPS for 2024-2026 are RMB 0.20, RMB 0.20, and RMB 0.21, respectively [1]
2023年报点评：水务业务量增价涨，高分红符合预期