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Beijing Enterprises Water Group Limited (HK:0371)
:0371

Beijing Enterprises Water Group (0371) AI Stock Analysis

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HK

Beijing Enterprises Water Group

(OTC:0371)

Rating:60Neutral
Price Target:
Beijing Enterprises Water Group's overall score of 60 reflects a balance of strengths and challenges. Notable strengths include stable gross and EBITDA margins, positive technical momentum, and an attractive dividend yield. However, high leverage, modest revenue growth, and challenges highlighted in the earnings call, such as declining main business revenue and ESG concerns, weigh on the overall assessment.

Beijing Enterprises Water Group (0371) vs. iShares MSCI Hong Kong ETF (EWH)

Beijing Enterprises Water Group Business Overview & Revenue Model

Company DescriptionBeijing Enterprises Water Group Limited, together with its subsidiaries, provides water treatment services. The company operates through Sewage and Reclaimed Water Treatment and Construction Services, Water Distribution Services, and Technical and Consultancy Services segments. It constructs sewage and reclaimed water treatment plants, and seawater desalination plants, as well as provides construction services for comprehensive renovation projects in the People's Republic of China, Malaysia, Australia, New Zealand, and the Republic of Botswana. The company also offers sewage and reclaimed water treatment services in Mainland China, the Republic of Singapore, the Portuguese Republic, Australia, and New Zealand; and distributes and sells piped water in Mainland China, the Portuguese Republic, and Australia. In addition, it provides technical and consultancy services; and sells machineries related to sewage treatment and construction services for comprehensive renovation projects in Mainland China and Australia. Further, the company is involved in the licensing of technical know-how related to sewage treatment. Beijing Enterprises Water Group Limited is headquartered in Wan Chai, Hong Kong.
How the Company Makes MoneyBeijing Enterprises Water Group makes money primarily through its water treatment and supply services. The company’s revenue streams include providing municipal water services, which involve operating and maintaining water supply networks and sewage treatment facilities for cities and towns. It also earns from industrial water solutions, offering customized treatment processes for factories and industrial parks. Residential water services add another revenue stream by supplying treated water to households. Additionally, the company engages in public-private partnerships where it collaborates with local governments for infrastructure projects, benefiting from long-term service contracts that ensure steady income.

Beijing Enterprises Water Group Earnings Call Summary

Earnings Call Date:Mar 26, 2025
(Q4-2024)
|
% Change Since: 12.91%|
Next Earnings Date:Sep 02, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook. While there were notable achievements such as an increase in free cash flow, improved dividends, and growth in urban resource services, significant challenges were highlighted, including a decline in main business revenue and BOT construction revenue, overseas project challenges, and a downgrade in ESG ratings. The company is making strategic shifts towards lighter assets and is focusing on operational efficiency and cash flow management to navigate fiscal challenges.
Q4-2024 Updates
Positive Updates
Increase in Free Cash Flow
Free cash flow registered a net inflow of RMB1.48 billion, marking a 35% increase compared to 2023.
Improved Dividend Yield
Annual dividends increased by 2.55% compared to 2023, with a dividend yield of around 7%.
Positive Performance in Water Treatment Services
Revenue from water treatment services increased by 5%, and net profit attributable to these services rose by 4% compared to 2023.
Urban Resource Services Growth
Revenue from urban resource services grew by 19% compared to 2023.
Reduction in Capital Expenditure
Capital expenditure was reduced by 41% compared to 2023, aligning with a transition towards lighter assets.
Decrease in Management and Financial Costs
Overheads decreased by 7%, and financial expenses were reduced by 5% compared to 2023.
Negative Updates
Decline in Main Business Revenue
Main business revenue decreased by 1% compared to 2023.
Reduction in BOT Construction Revenue
BOT construction revenue fell by 42% due to a strategic shift away from heavy asset projects.
Challenges in Overseas Projects
Overseas projects maintained revenue levels but experienced a 2 percentage point decrease in gross profit due to exiting high gross margin projects in Portugal.
Decrease in Gross Margin for Water Supply Service
Gross margin for water supply services decreased by 5 percentage points due to a shrinking real estate market.
Asset Impairment Concerns
Asset impairment for 2024 was RMB800 million, with expectations for similar levels in 2025 if local fiscal conditions do not improve.
ESG Rating Downgrade
MSCI downgraded the ESG rating from A to BBB, citing increased ESG risk exposure.
Company Guidance
In the 2024 Annual Results Presentation, BEWG reported key financial metrics, revealing a slight decline in main business revenue to RMB24.27 billion, a 1% decrease from 2023, while net profit attributable to the parent company rose by 12% to RMB1.68 billion. The company highlighted an increase in free cash flow by 35% to RMB1.48 billion and an annual dividend of HKD16.1 cents per share, a 2.55% increase from the previous year. Operational cash flow stood at RMB2.07 billion, with water treatment service revenue growing by 5% to RMB12.25 billion. The group also registered improvements in management costs, with overheads reduced by 7% to RMB3.07 billion, and financial expenses down by 5% to RMB3.09 billion. BEWG's strategy for 2025 focuses on enhancing cash flow, operational efficiency, and talent development, with expected revenue growth in water business by 5%, a 40% decline in construction, and a 5% increase in technical service and machinery sales. Additionally, the company's ESG efforts and strategic shifts towards lighter asset management were emphasized as part of their sustainable development goals.

Beijing Enterprises Water Group Financial Statement Overview

Summary
Beijing Enterprises Water Group shows stability in its gross and EBITDA margins but faces challenges in revenue growth and debt management. The company's high debt levels and modest return on equity could pose financial risks, while recent improvements in free cash flow are a positive sign. Strategic focus on improving cash flow and reducing debt could enhance financial health.
Income Statement
65
Positive
The income statement shows a mixed performance. While the company has maintained a solid gross profit margin of 37.0% for the latest year, both revenue and net income have seen a decline. Revenue growth rate over the past year is negative (-4.3%), and the net profit margin decreased to 7.5%. However, EBITDA margin remains healthy at 28.7%.
Balance Sheet
55
Neutral
The balance sheet exhibits high leverage with a debt-to-equity ratio of 2.43, indicating a reliance on debt financing. Return on Equity (ROE) stands at 5.8%, suggesting modest profitability relative to equity. The equity ratio of 18.7% reflects a lower proportion of equity in the company's capital structure, which could imply financial risk.
Cash Flow
40
Negative
Cash flow analysis reveals challenges in cash generation, with free cash flow being consistently negative in previous years but turning positive in the last reported year. The operating cash flow to net income ratio is unavailable due to missing data, limiting a full evaluation of cash flow efficiency.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
25.83B26.97B24.98B27.88B25.36B
Gross Profit
9.57B9.90B9.74B10.37B9.67B
EBIT
6.64B7.32B6.34B7.25B7.21B
EBITDA
7.40B8.29B6.58B8.17B8.67B
Net Income Common Stockholders
1.93B2.19B1.44B4.41B4.42B
Balance SheetCash, Cash Equivalents and Short-Term Investments
9.59B11.26B13.73B11.22B15.29B
Total Assets
177.24B182.44B183.95B183.62B174.40B
Total Debt
80.54B82.11B86.42B80.49B80.32B
Net Debt
70.95B70.85B72.74B69.33B65.07B
Total Liabilities
117.70B122.76B128.49B124.33B125.09B
Stockholders Equity
35.41B28.39B32.69B38.81B36.16B
Cash FlowFree Cash Flow
1.05B498.19M-1.40B-6.68B-7.79B
Operating Cash Flow
2.08B2.88B-364.83M-4.32B-6.10B
Investing Cash Flow
-583.76M-2.25B-1.13B3.16B332.50M
Financing Cash Flow
-2.64B-2.58B4.88B-3.06B8.10B

Beijing Enterprises Water Group Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price2.44
Price Trends
50DMA
2.39
Positive
100DMA
2.29
Positive
200DMA
2.26
Positive
Market Momentum
MACD
0.02
Positive
RSI
47.99
Neutral
STOCH
11.45
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0371, the sentiment is Neutral. The current price of 2.44 is below the 20-day moving average (MA) of 2.50, above the 50-day MA of 2.39, and above the 200-day MA of 2.26, indicating a neutral trend. The MACD of 0.02 indicates Positive momentum. The RSI at 47.99 is Neutral, neither overbought nor oversold. The STOCH value of 11.45 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HK:0371.

Beijing Enterprises Water Group Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
64
Neutral
$8.58B10.364.24%4.64%4.07%-13.04%
60
Neutral
$24.43B14.405.86%7.46%7.33%-7.17%
$1.32B7.4011.34%7.87%
$5.56B13.789.81%3.64%
DE27K
€79.19M2.872.85%
HK$550.21M2.866.20%8.59%
61
Neutral
HK$617.47M2.165.17%-13.42%-18.54%
* Utilities Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HK:0371
Beijing Enterprises Water Group
2.44
0.14
6.09%
CWAFF
China Water Affairs Group
0.85
0.12
16.44%
GGDVF
Guangdong Investment
0.85
0.31
57.41%
DE:27K
Kangda International Environmental Co Ltd
0.03
<0.01
50.00%
HK:2281
Luzhou Xinglu Water (Group) Co., Ltd. Class H
0.64
0.05
8.47%
HK:3768
Kunming Dianchi Water Treatment Co., Ltd. Class H
0.60
-0.12
-16.67%

Beijing Enterprises Water Group Corporate Events

Beijing Enterprises Water Group Relocates Hong Kong Office
Jun 16, 2025

Beijing Enterprises Water Group Limited has announced a change in its head office and principal place of business in Hong Kong to a new location at 66/F., Central Plaza, 18 Harbour Road, Wanchai, effective from 16 June 2025. This relocation is a strategic move that could enhance the company’s operational efficiency and strengthen its presence in the Hong Kong market, potentially impacting stakeholders positively by improving access and visibility.

The most recent analyst rating on (HK:0371) stock is a Buy with a HK$2.80 price target. To see the full list of analyst forecasts on Beijing Enterprises Water Group stock, see the HK:0371 Stock Forecast page.

Beijing Enterprises Water Group Announces Executive Appointment and Committee Restructuring
Jun 5, 2025

Beijing Enterprises Water Group Limited has appointed Ms. Zhou Xueyan as an executive director, effective June 5, 2025. Ms. Zhou brings extensive experience from her roles in various related companies and is expected to contribute significantly to the company’s strategic direction. Additionally, the company has restructured its Nomination Committee to comply with upcoming amendments to the Listing Rules and Corporate Governance Code, enhancing its corporate governance practices.

The most recent analyst rating on (HK:0371) stock is a Hold with a HK$2.20 price target. To see the full list of analyst forecasts on Beijing Enterprises Water Group stock, see the HK:0371 Stock Forecast page.

Beijing Enterprises Water Group Announces Board and Committee Roles
Jun 5, 2025

Beijing Enterprises Water Group has announced the composition of its board of directors and the roles within its established committees. The board includes executive, non-executive, and independent non-executive directors, with Mr. Xiong Bin serving as Chairman and Mr. Zhou Min as CEO. The announcement outlines the structure of the Audit, Nomination, and Remuneration Committees, indicating a robust governance framework aimed at enhancing operational oversight and strategic decision-making within the company.

The most recent analyst rating on (HK:0371) stock is a Hold with a HK$2.20 price target. To see the full list of analyst forecasts on Beijing Enterprises Water Group stock, see the HK:0371 Stock Forecast page.

Beijing Enterprises Water Group Updates Final Dividend for 2024
Jun 3, 2025

Beijing Enterprises Water Group Limited announced an update to its final cash dividend for the year ending December 31, 2024, with a declared dividend of HKD 0.091 per share. Shareholders have the option to receive the dividend in RMB at an exchange rate of HKD 1 to RMB 0.916928. The ex-dividend date is set for June 10, 2025, with payment scheduled for July 28, 2025. This announcement reflects the company’s commitment to providing returns to its shareholders and may influence investor sentiment positively.

The most recent analyst rating on (HK:0371) stock is a Buy with a HK$2.80 price target. To see the full list of analyst forecasts on Beijing Enterprises Water Group stock, see the HK:0371 Stock Forecast page.

Beijing Enterprises Water Group Announces AGM Results and Director Re-elections
Jun 3, 2025

Beijing Enterprises Water Group Limited announced the results of its 2025 Annual General Meeting, where all proposed resolutions were passed by shareholder vote. Key resolutions included the approval of the 2024 financial statements, the declaration of a final dividend of HK9.1 cents per share, and the re-election of several directors, including Mr. Zhou Min, Ms. Sha Ning, Mr. Yuan Jianwei, and Mr. Guo Rui. The successful passing of these resolutions reflects strong shareholder support and is likely to reinforce the company’s governance and financial strategies moving forward.

The most recent analyst rating on (HK:0371) stock is a Buy with a HK$2.80 price target. To see the full list of analyst forecasts on Beijing Enterprises Water Group stock, see the HK:0371 Stock Forecast page.

Beijing Enterprises Water Group Announces 2025 AGM and Key Resolutions
Apr 28, 2025

Beijing Enterprises Water Group Limited has announced its upcoming Annual General Meeting (AGM) scheduled for June 3, 2025, in Hong Kong. Key resolutions to be discussed include the approval of the audited financial statements for 2024, declaration of a final dividend of HK9.1 cents per share, re-election of directors, and re-appointment of auditors. Additionally, the company seeks shareholder approval to authorize the purchase of up to 10% of its own shares, which could impact its market positioning and shareholder value.

Beijing Enterprises Water Group Declares Final Dividend for 2024
Mar 26, 2025

Beijing Enterprises Water Group Limited announced a final cash dividend of HKD 0.091 per share for the financial year ending December 31, 2024, with shareholders’ approval scheduled for June 3, 2025. The announcement reflects the company’s stable financial performance and commitment to returning value to its shareholders, potentially impacting its market position positively.

Beijing Enterprises Water Group Reports 2024 Financial Results Amid Operational Enhancements
Mar 26, 2025

Beijing Enterprises Water Group reported a decrease in profit attributable to shareholders by 11.5% for the year ended December 31, 2024, with EBITDA also declining by 4.5%. Despite these financial challenges, the company maintained positive free cash flow for three consecutive years and continued to enhance its operational service capabilities, focusing on digital and intelligent solutions to drive growth in sewage treatment operations. The company also sustained reductions in administrative expenses and finance costs, while advancing research and development in process technologies to improve water plant performance.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.