China Water Affairs Group (0855) AI Stock Analysis

• Market Cap: $9.92B
• Dividend Yield: 6.61%
• Average Volume (3M): 1.58M
• Price to Earnings (P/E): 9.2
• Beta (1Y): 0.81
• Revenue Growth: -9.36%
• EPS Growth: -29.90%
• Country: HK
• Employees: 11,400
• Sector: Utilities
• Sector Strength: 56
• Industry: Regulated Water
• EPS (TTM): 0.20
• Shares Outstanding: 1,632,322,400
• 10 Day Avg. Volume: 1,426,419
• 30 Day Avg. Volume: 1,580,998
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 4.02
• Enterprise Value/Revenue: 4.44
• Enterprise Value/Gross Profit: 11.75
• Enterprise Value/Ebitda: 10.85
• 1Y Price Target: $6.47
• Price Target Upside: 4.96% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 63 Neutral
• Price Target: HK$6.50 ▲(5.52% Upside)

The overall stock score reflects stable operational efficiency and attractive valuation metrics, offset by concerns over declining revenue growth, high leverage, and weak cash generation. The technical indicators suggest a neutral market sentiment, lacking strong momentum.

Positive Factors

Operational Efficiency

Newly developed direct drinking water operation is less capital intensive than its traditional water business, offering potential cost savings.

Partnerships

CWA is a preferred partner when acquiring new water projects from municipal governments, enhancing growth opportunities.

Revenue Stream

Steady, regulated revenue stream from water supply contributes to reliable financial performance.

Negative Factors

Debt Levels

High net debt-equity ratio poses a significant risk to financial stability.

Valuation

CWA trades at approximately 4x FY25F P/E, significantly below its 7-year average, indicating potential market concerns.

China Water Affairs Group Business Overview & Revenue Model

Company Description

China Water Affairs Group (0855) is a leading water supply company based in China, primarily engaged in the development, management, and operation of water supply systems. The company operates in various sectors, including municipal water supply, wastewater treatment, and the provision of related services. Its core offerings encompass the construction and operation of water treatment facilities, as well as the supply of potable water to urban and rural areas across multiple provinces in China.

How the Company Makes Money

China Water Affairs Group generates revenue through several key streams, primarily from the sale of treated water to municipal and industrial customers. The company engages in long-term agreements with local governments and municipalities, which provide a stable income from water supply contracts. Additionally, revenue is derived from wastewater treatment services, where the company charges fees for the processing of sewage and industrial wastewater. The company also benefits from investments in new water infrastructure projects, which are often funded through public-private partnerships. Moreover, strategic collaborations with governmental bodies and other enterprises enhance its operational capabilities and facilitate expansion into new markets, further contributing to its earnings.

China Water Affairs Group Financial Statement Overview

Summary

China Water Affairs Group demonstrates stable operational efficiency with healthy profitability margins. However, declining revenue growth and high leverage pose significant financial risks. The company's cash generation capabilities are concerning, potentially impacting future investments and debt servicing.

Income Statement

The income statement shows a mixed performance with declining revenue growth and net profit margins over the years. The gross profit margin remains stable, indicating efficient cost management. However, the negative revenue growth rate in recent years is a concern. The EBIT and EBITDA margins are healthy, suggesting strong operational efficiency.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio, indicating significant leverage, which could pose risks in volatile market conditions. Return on equity has decreased, reflecting reduced profitability for shareholders. The equity ratio is stable, suggesting a balanced asset structure.

Cash Flow

Cash flow analysis indicates a significant decline in free cash flow growth, raising concerns about cash generation capabilities. The operating cash flow to net income ratio is low, suggesting potential issues in converting income into cash. The free cash flow to net income ratio is also low, indicating limited cash available for reinvestment or debt reduction.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	8.99B	11.66B	12.86B	14.19B	12.95B	10.35B
Gross Profit	3.40B	4.40B	4.78B	5.35B	4.96B	4.34B
EBITDA	3.68B	4.72B	5.15B	5.13B	4.67B	4.07B
Net Income	1.09B	1.07B	1.53B	1.86B	1.89B	1.69B
Balance Sheet
Total Assets	66.32B	65.89B	63.24B	61.16B	57.06B	47.04B
Cash, Cash Equivalents and Short-Term Investments	5.15B	4.78B	5.30B	8.15B	7.68B	5.45B
Total Debt	26.11B	25.64B	25.22B	24.16B	22.39B	19.14B
Total Liabilities	43.75B	44.02B	41.79B	39.79B	36.36B	30.13B
Stockholders Equity	13.51B	13.17B	12.79B	12.99B	12.97B	10.23B
Cash Flow
Free Cash Flow	1.57B	149.70M	-2.36B	-948.69M	-166.82M	-1.02B
Operating Cash Flow	1.98B	3.39B	2.78B	3.68B	3.88B	2.84B
Investing Cash Flow	-3.71B	-2.87B	-5.43B	-4.16B	-4.48B	-4.75B
Financing Cash Flow	1.03B	-438.20M	605.35M	1.73B	2.61B	-392.29M

China Water Affairs Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6.16
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0855, the sentiment is Positive. The current price of 6.16 is below the 20-day moving average (MA) of 6.17, below the 50-day MA of 6.24, and above the 200-day MA of 5.66, indicating a neutral trend. The MACD of -0.04 indicates Negative momentum. The RSI at 51.20 is Neutral, neither overbought nor oversold. The STOCH value of 65.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:0855.

China Water Affairs Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	66 Neutral	$17.06B	17.77	5.60%	3.68%	6.63%	11.55%
0855	63 Neutral	$9.92B	9.23	8.28%	6.61%	-9.36%	-29.90%
BJWTF	―	$3.34B	16.59	4.79%	6.85%	―	―
GGDVF	―	$6.18B	14.07	10.30%	4.32%	―	―
27K	―	€88.12M	3.40	2.82%	―	―	―
2281	―	HK$636.19M	3.19	6.37%	5.95%	―	―
3768	68 Neutral	HK$751.25M	2.82	4.69%	―	-9.45%	-17.46%

China Water Affairs Group Corporate Events

China Water Affairs Group Announces Cash Offer for Kangda International

China Water Affairs Group Limited, along with Sharp Profit Investments Limited and Mr. Duan Chuan Liang, has issued a joint announcement regarding the despatch of a composite document related to a mandatory unconditional cash offer. This offer, facilitated by First Shanghai Securities Limited, aims to acquire all issued shares and cancel outstanding share options of Kangda International Environmental Company Limited. The document includes terms of the offer, recommendations from the Independent Board Committee, and advice from the Independent Financial Adviser. The offer opens for acceptance on September 1, 2025, with a closing date set for September 22, 2025.

The most recent analyst rating on (HK:0855) stock is a Hold with a HK$6.50 price target. To see the full list of analyst forecasts on China Water Affairs Group stock, see the HK:0855 Stock Forecast page.

China Water Affairs Group Announces 2025 Annual General Meeting

China Water Affairs Group Limited has announced its upcoming annual general meeting scheduled for September 19, 2025, in Hong Kong. Key agenda items include the consideration of audited financial statements, declaration of a final dividend, re-election of directors, and the appointment of auditors. The company also seeks approval for the directors to allot and issue additional shares, which could impact the company’s capital structure and shareholder value.

The most recent analyst rating on (HK:0855) stock is a Hold with a HK$6.50 price target. To see the full list of analyst forecasts on China Water Affairs Group stock, see the HK:0855 Stock Forecast page.

China Water Affairs Proposes Auditor Change to Ernst & Young

China Water Affairs Group Limited announced a proposed change of auditor, with PricewaterhouseCoopers set to retire at the upcoming annual general meeting. The board has recommended Ernst & Young as the new auditor, citing their experience, industry knowledge, and resources. This change is part of the company’s commitment to good corporate governance and maintaining auditor independence, with no disagreements reported between the company and PwC.

The most recent analyst rating on (HK:0855) stock is a Buy with a HK$5.30 price target. To see the full list of analyst forecasts on China Water Affairs Group stock, see the HK:0855 Stock Forecast page.

China Water Affairs Group Delays Document Dispatch for Kangda Acquisition

China Water Affairs Group Limited, through its subsidiary Sharp Profit Investments Limited, is involved in a joint cash offer with Mr. Duan Chuan Liang to acquire all issued shares and cancel outstanding share options of Kangda International Environmental Company Limited. The despatch of the Composite Document related to this offer has been delayed, with the new deadline set for 2 September 2025, as more time is needed for finalization. Stakeholders are advised to wait for the Composite Document before making any decisions regarding the offer.

The most recent analyst rating on (HK:0855) stock is a Buy with a HK$5.30 price target. To see the full list of analyst forecasts on China Water Affairs Group stock, see the HK:0855 Stock Forecast page.

China Water Affairs Group Initiates Cash Offer for Kangda International

China Water Affairs Group, through its subsidiary Sharp Profit Investments Limited, is involved in a mandatory unconditional cash offer to acquire all issued shares of Kangda International Environmental Company Limited. This move follows Mr. Duan Chuan Liang’s exchange of bonds for a significant shareholding in Kangda, triggering the takeover code requirement for a cash offer. The offer price is set at HK$0.348 per share, which is higher than the previous exchange price, reflecting the company’s strategic effort to consolidate its stake in Kangda and potentially strengthen its market position.

The most recent analyst rating on (HK:0855) stock is a Buy with a HK$6.20 price target. To see the full list of analyst forecasts on China Water Affairs Group stock, see the HK:0855 Stock Forecast page.

China Water Affairs Group Forms Nomination Committee for Transparent Governance

China Water Affairs Group has established a Nomination Committee to ensure fair and transparent director appointments. The committee, primarily composed of independent non-executive directors, is tasked with reviewing board diversity, assessing director contributions, and making recommendations for board appointments and succession planning, aligning with the company’s corporate strategy.

The most recent analyst rating on (HK:0855) stock is a Buy with a HK$6.20 price target. To see the full list of analyst forecasts on China Water Affairs Group stock, see the HK:0855 Stock Forecast page.

China Water Affairs Group Reports Decline in Annual Revenue and Profit

China Water Affairs Group Limited reported a decline in revenue and profit for the year ended March 31, 2025, with total revenue dropping by 9.4% and profit attributable to owners decreasing by 29.9%. The company saw significant reductions in pipeline direct drinking water supply construction services and pipeline direct drinking water supply operations, while sewage treatment and drainage operations services experienced a notable increase. Despite the challenges, the company maintained its final dividend per share at HK15 cents, indicating a commitment to shareholder returns.

The most recent analyst rating on (HK:0855) stock is a Buy with a HK$6.20 price target. To see the full list of analyst forecasts on China Water Affairs Group stock, see the HK:0855 Stock Forecast page.

China Water Affairs Group Declares Final Dividend for FY 2025

China Water Affairs Group Limited announced a final ordinary cash dividend of HKD 0.15 per share for the financial year ending March 31, 2025. The dividend reflects the company’s stable financial performance and commitment to shareholder returns, with the payment date set for November 14, 2025, following shareholder approval in September.

The most recent analyst rating on (HK:0855) stock is a Buy with a HK$6.20 price target. To see the full list of analyst forecasts on China Water Affairs Group stock, see the HK:0855 Stock Forecast page.

China Water Affairs Reschedules Board Meeting for FY25 Results

China Water Affairs Group Limited announced a rescheduling of its board meeting originally set for June 27, 2025, to June 30, 2025, to allow additional time for finalizing its annual results for the fiscal year ending March 31, 2025. This change may impact the timing of the company’s financial disclosures and potential dividend announcements, potentially affecting investor expectations and market positioning.

The most recent analyst rating on (HK:0855) stock is a Buy with a HK$6.20 price target. To see the full list of analyst forecasts on China Water Affairs Group stock, see the HK:0855 Stock Forecast page.