HSBC Research released research reports indicating that Beijing Enterprises Water Group (00371.HK) performed as expected in the mid-term results, with a net profit of 1.1 billion yuan in the first half of the year, although it fell by 18% year-on-year, it is still expected to reach the company's full-year guidance of 2 billion yuan. During the period, revenue from construction services decreased by 49% year-on-year due to fewer new projects, but operating business revenue still showed resilience, growing by 7% year-on-year, believed to be due to increases in water treatment volume, water distribution, and fees.

The bank believes that the decline in non-cash construction service revenue will not have a significant impact on its dividend prospects, maintains a 'hold' rating, and raises the target price from the original 2.4 yuan to 2.6 yuan, believing that there is limited room for dividend growth, and the management has indicated a priority to reduce leverage ratio, considering the current price valuation as reasonable.