Zhitong Financial APP learned that the first Shanghai released a research report that maintained China Water (00855) "buy" rating, with a target price of HK $10.70. In the future, the company will continue to focus on the integration of urban and rural water supply and the integration of water supply and drainage, and regard direct drinking water business as the key development strategy in the next five years. Based on the expectation of double-digit growth in tap water supply and the explosive growth of the direct drinking water business, the bank estimates a net return profit of HK $2.18 billion\ 2.53 billion\ 3 billion over the next three years.
First, the main points of Shanghai are as follows:
The company's net profit of returning to the parent increased by 12% in fiscal year 2111:
During the period, the company's revenue increased by 25.2% over the same period last year to HK $12.95 billion, of which the water supply sector earned HK $9.65 billion, up 14.9% from the same period last year, and the direct drinking water sector (listed separately for the first time) earned HK $690 million, up 394% from the same period last year. Environmental protection business revenue increased 5% to 1.22 billion yuan. For the whole year, the dividend per share was 34 Hong Kong cents, an increase of 9.7% over the same period last year, and the dividend payout rate for the whole year was 29.3%.
Water supply business and water treatment have developed steadily, and direct drinking water business has developed by leaps and bounds:
During the period, the company's water supply business revenue increased by 14.9% compared with the same period last year, of which the water supply service business grew by 20.3%. A total of 10 projects achieved price adjustments, the most in years. By the end of the period, the treatment scale of the company's tap water business has reached 10.12 million tons per day, and the scale under construction and proposed construction has reached 6.58 million tons per day. In addition, Kangda has an environmental capacity of 4.36 million tons per day. During the period, the company's direct drinking water business started explosive growth, with more than 1000 new projects, about 1.5 million new users and 11 million new potential service population.
By the end of the period, the company's direct drinking water business covers more than 100 counties and cities in 20 provinces, with more than 2000 projects (already under construction) and serving a population of more than 3 million. The company has been in the field of direct drinking water for as long as 7 years, with a leading advantage and many high-tech reserves, coupled with the fact that direct drinking water can meet people's demand for high-quality drinking water, effectively reduce the waste of water resources and low-carbon environmental protection. With the characteristics of huge market development potential, the company's direct drinking water business is expected to develop rapidly in the next five years.
Financing costs are down, and companies are still flush with capital:
During the period, the company's average borrowing cost was reduced by 0.2ppt to 4.4%, and the total asset-liability ratio rose slightly to 64.1%, still maintaining a healthy and sound financial position. During the period, the company issued $150 million of green bonds due in 2026, cash and structured deposits increased by 42.1 per cent to 7.44 billion, with ample cash flow. The company will be water supply and direct drinking water business spin-off listing process is also in progress as scheduled, there is no longer expected to be financing demand in the short term.