According to Zhixun365, water-related stocks rose across the board in early trading, as of press time, Guangdong Inv(00270) rose by 3.81% to HKD 4.63; China Water (00855) rose by 2.76% to HKD 5.95; BJ Ent Water(00371) rose 1.87% to HKD 2.72.

Everbright Securities pointed out that the reform of Guangzhou's tap water prices this time plans to raise the overall price of water use and optimize the base of the tiered water consumption. It can further improve the mechanism of tap water prices that is conducive to water conservation, directly alleviate the profit improvement of water supply enterprises, relieve the operation pressure of tap water supply enterprises, and guarantee the long-term development of water supply security. In the long run, according to the research results of the Development and Research Center of the Ministry of Water Resources, the current water price level is lower than the lower limit that water users in China can afford, and more cities are expected to raise water prices in the future. The bank pointed out that the water industry in various regions is expected to enter a new round of price increase cycle, ensuring the high-quality operation of stock projects.

Orient Securities previously pointed out that the newly revised "Urban Water Supply Price Management Measures" in 2021 clearly stipulates that, based on cost supervision, the permitted income is determined by verifying and permitting costs, supervising and permitting revenue, and determining water supply prices based on the verified water supply volume. Such a pricing method for water prices, coupled with a relatively long water price adjustment period, determines that the company's revenue and profit capabilities remain relatively stable. It makes water supply companies have strong dividend capabilities and relatively stable expectations.