Golden Horse Financial News | gtja issued research reports, stating that the installation, maintenance, and construction of water affairs business of China Water (00855) affected the company's FY2024 performance. 1) In FY2024, the company achieved a revenue of 12.859 billion Hong Kong dollars, a 9% year-on-year decrease; the net income attributable to shareholders was 1.534 billion Hong Kong dollars, a 17% year-on-year decline. 2) The company continues to advance its dual-wheel drive strategy of water supply + pipeline direct drinking water, with profits declining mainly due to the decrease in installation, maintenance, and construction projects of urban water supply and environmental protection business, as well as the depreciation of the renminbi. 3) In terms of urban water supply business, the company achieved a revenue of 8.276 billion Hong Kong dollars, down 5% year-on-year; the profit of the urban water supply division was 2.49 billion Hong Kong dollars, a 12% year-on-year decline, mainly due to the overall decrease in installation and maintenance projects and construction projects.

The bank continued to point out that the company's pipeline direct drinking water revenue in FY2024 increased by 31% year-on-year to 1.722 billion Hong Kong dollars; the divisional profit was 0.592 billion Hong Kong dollars, a 17% year-on-year increase; the company's direct drinking water business is rapidly expanding, contributing significantly to the performance growth. 2) The company had been actively promoting the listing of the Silver Dragon Water Supply Group, but on September 11, 2024, it announced the suspension of the spin-off plan due to cautious consideration of the group's development strategy and the recent capital market environment. The board of directors believes that the suspension of the spin-off listing of Silver Dragon Water will not have an impact on the company's financial condition and operations.

The bank stated that based on financial report data, it revised down the company's forecasted net income for FY2025-2026 and added FY2027 to 16.28 (previously 19.73), 17.12 (previously 20.62), and 1.804 billion Hong Kong dollars, corresponding to EPS of 1.00, 1.05, and 1.10 Hong Kong dollars. The company's pipeline direct drinking water business is rapidly developing, driving performance growth, maintaining a 'shareholding' rating.