The Zhitong Finance App learned that Dongwu Securities released a research report saying that maintaining the “buy” rating of China Water (00855), the steady expansion of the scale of water supply taps and the increase in water prices will determine the return, and there is broad space for direct drinking water. Recently, the company released interim results for fiscal year 2023, achieving operating income of HK$6.785 billion, an increase of 4.8%, an increase of 8.6% excluding exchange rate effects, net profit of HK$970 million, and plans to distribute an interim dividend of HK$0.16 per share.

According to the report, the revenue of the company's direct drinking water business increased by 70%, and its rise accelerated under the dual main business strategy. FY2023H1, the company's direct drinking water business achieved revenue of HK$406 million, an increase of 69.9% over the same period. Excluding exchange rate fluctuations, the same increase was 76.1%. Among them, 1) Direct drinking water operation achieved revenue of HK$887 million, an increase of 129%; 2) Direct drinking water connection: achieved revenue of HK$46 million, an increase of 94%; 3) Direct drinking water construction: achieved revenue of HK$273 million, an increase of 54%. FY202H1 added more than 1,600 new direct drinking water projects, adding about 1 million new users. As of 2022/9/30, more than 4,000 direct drinking water projects have been developed, serving more than 4 million people. The revenue share of the company's direct drinking water business increased from 1% in FY2020 to 6% in FY2023H1, and the direct drinking water business has gradually risen to a new main business. The market for direct drinking water from consumption upgrades is broad, and the advantages of expanding direct drinking water supply from taps are outstanding.