Kunming Dianchi Water Treatment Co., Ltd. Class H (3768) AI Stock Analysis

• Market Cap: HK$658.63M
• Dividend Yield: N/A
• Average Volume (3M): 242.07K
• Price to Earnings (P/E): 2.4
• Beta (1Y): 0.56
• Revenue Growth: -13.42%
• EPS Growth: -18.54%
• Country: HK
• Employees: 1,115
• Sector: Utilities
• Sector Strength: 74
• Industry: Regulated Water
• EPS (TTM): 0.12
• Shares Outstanding: 340,023,000
• 10 Day Avg. Volume: 447,700
• 30 Day Avg. Volume: 242,066
• PEG Ratio: -0.65
• Price to Book (P/B): 0.27
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -1.88
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: HK$0.50
• Price Target Upside: -21.88% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 61 Neutral
• Price Target: HK$0.50 ▼(-21.88%Downside)

The overall stock score for Kunming Dianchi Water Treatment Co., Ltd. Class H is 61, reflecting moderate financial health with challenges related to declining revenue and profitability. The stock's technical outlook is neutral, and while the valuation appears attractive with a low P/E ratio, the lack of dividend yield may deter some investors. The absence of significant earnings call data and corporate events results in a focus on the financial and valuation aspects.

Kunming Dianchi Water Treatment Co., Ltd. Class H Business Overview & Revenue Model

Company Description

Kunming Dianchi Water Treatment Co., Ltd., together with its subsidiaries, designs, develops, constructs, operates, and maintains water supply and wastewater treatment facilities in the People's Republic of China. The company operates through Wastewater Treatment, Water Supply, and Others segments. It designs, constructs, operates, and maintains wastewater treatment or water supply facilities under the transfer-operate-transfer and build-operate-transfer concession agreements. The company is also involved in the reclaimed water supply and running water supply; municipal wastewater treatment; water quality testing; provision of logistics and leasing services, and professional training; and manufacture and sale of chemical products. In addition, it provides management, transportation, watershed management, sludge recycling, mine restoration, and solid waste treatment and disposal services, as well as engages in the thermal production activities. The company was founded in 1989 and is headquartered in Kunming, the People's Republic of China. Kunming Dianchi Water Treatment Co., Ltd. is a subsidiary of Kunming Dianchi Investment Co., Ltd.

How the Company Makes Money

Kunming Dianchi Water Treatment Co., Ltd. generates revenue primarily through the operation and management of water treatment facilities. The company earns income from providing sewage treatment services, where it charges municipalities and industrial clients for treating wastewater to meet environmental standards. Additionally, it maintains revenue streams from water supply services, delivering treated water to urban and industrial customers. The company may also engage in public-private partnerships, allowing it to secure long-term contracts with local governments. These contracts often provide stable, recurring revenue streams, contributing significantly to its earnings. The company's focus on sustainability and compliance with environmental regulations further enhances its market position and financial performance.

Kunming Dianchi Water Treatment Co., Ltd. Class H Financial Statement Overview

Summary

Kunming Dianchi Water Treatment Co., Ltd. Class H faces challenges with declining revenue and profitability, coupled with a reliance on debt financing. While operational efficiency remains relatively stable, there is a need for strategic measures to enhance revenue growth and manage leverage. The company's financial health is moderate, with potential risks associated with leverage and cash flow volatility.

Income Statement

The company shows declining revenue over the past years, with a significant drop from 2021 to 2024. Gross profit margin has remained relatively stable, indicating efficiency in managing production costs. Net profit margin has seen a decline, reflecting potential challenges in managing operational expenses. EBIT and EBITDA margins are solid, though they have decreased slightly over time, indicating a potential reduction in operational efficiency.

Balance Sheet

The company's debt-to-equity ratio is relatively high, suggesting a higher reliance on debt financing. However, the equity ratio reflects a reasonable proportion of equity financing. Return on equity has been decreasing, indicating a declining effectiveness in generating profits from shareholders' equity. Overall, the balance sheet shows moderate financial stability but with heightened leverage risks.

Cash Flow

Operating cash flow has been volatile, with negative figures in past years turning positive in recent periods, indicating some improvement in operational efficiency. The free cash flow growth rate is inconsistent, reflecting challenges in maintaining consistent cash flow generation. The cash flow ratios indicate moderate efficiency in converting income into cash, although improvements are needed to ensure sustainability.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.59B	1.81B	2.07B	2.32B	1.92B
Gross Profit	713.65M	798.24M	857.27M	724.78M	679.18M
EBITDA	807.54M	918.92M	931.61M	915.83M	886.78M
Net Income	263.22M	316.51M	322.25M	338.28M	348.55M
Balance Sheet
Total Assets	12.38B	12.06B	11.70B	12.07B	10.50B
Cash, Cash Equivalents and Short-Term Investments	130.58M	174.09M	371.49M	1.80B	1.05B
Total Debt	4.59B	5.27B	5.89B	6.41B	4.97B
Total Liabilities	7.14B	7.09B	7.04B	7.63B	6.22B
Stockholders Equity	5.23B	4.97B	4.65B	4.43B	4.27B
Cash Flow
Free Cash Flow	132.63M	135.22M	-671.96M	-776.48M	-802.33M
Operating Cash Flow	293.82M	220.95M	-302.63M	-716.96M	-613.47M
Investing Cash Flow	75.67M	303.83M	-96.54M	230.91M	-290.73M
Financing Cash Flow	-532.84M	-480.55M	-973.54M	1.24B	387.55M

Kunming Dianchi Water Treatment Co., Ltd. Class H Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.64
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:3768, the sentiment is Positive. The current price of 0.64 is above the 20-day moving average (MA) of 0.61, above the 50-day MA of 0.60, and above the 200-day MA of 0.62, indicating a bullish trend. The MACD of 0.01 indicates Negative momentum. The RSI at 74.25 is Negative, neither overbought nor oversold. The STOCH value of 86.67 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:3768.

Kunming Dianchi Water Treatment Co., Ltd. Class H Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	67 Neutral	¥332.07B	7.66	9.28%	2.76%	2.39%	8.81%
3768	61 Neutral	HK$658.63M	2.42	5.17%	―	-13.42%	-18.54%
27K	―	€80.99M	3.07	2.85%	―	―	―
2WI	―	€25.50M	―	-151.78%	―	―	―
1129	41 Neutral	HK$135.92M	―	-33.47%	―	-26.87%	-53.44%
1542	41 Neutral	HK$77.50M	―	-11.64%	5.16%	-2.67%	-11.08%
2281	―	HK$550.21M	2.86	6.20%	6.88%	―	―

Kunming Dianchi Water Treatment Co., Ltd. Class H Corporate Events

Kunming Dianchi Water Treatment Co., Ltd. Invests in Major Plant Expansion

Kunming Dianchi Water Treatment Co., Ltd. has announced an investment of RMB69.3059 million for the expansion and renovation of its Kunming No. 7 and No. 8 Water Purification Plants. The project, which involves increasing the treatment capacity of biological ponds and constructing additional facilities, is being executed through an EPC contract with China Railway No.10 Engineering and Beijing General Municipal Engineering Design & Research Institute. This strategic move is expected to bolster the company’s operational capabilities and maintain effluent standards, potentially strengthening its position in the water treatment industry.

Kunming Dianchi Water Treatment Extends Entrusted Loan Agreement

Kunming Dianchi Water Treatment Co., Ltd. has announced an extension of an entrusted loan agreement with Kunming Anju Group, extending the term of a RMB72 million loan to June 16, 2026. This extension, following arm’s length negotiations, is part of the company’s strategic financial management and is classified as a discloseable transaction under Hong Kong’s Listing Rules, reflecting its ongoing financial engagements to support its business activities.

Kunming Dianchi Water Treatment Co., Ltd. Announces 2024 AGM with Key Resolutions

Kunming Dianchi Water Treatment Co., Ltd. has announced its 2024 Annual General Meeting (AGM) scheduled for June 27, 2025, where shareholders will vote on various resolutions. These include approving the 2024 financial reports, profit distribution plan, auditor appointments, and several amendments to company procedures and articles. The AGM will also address the extension of a significant entrusted loan and the abolition of the Board of Supervisors, which could impact the company’s governance and financial strategy.

Kunming Dianchi Water Treatment Extends Entrusted Loan Agreement

Kunming Dianchi Water Treatment Co., Ltd. has announced the extension of an entrusted loan agreement with Kunming Development and Chenggong District Rural Credit Cooperative. The agreement extends the loan term to June 2026, maintaining the principal amount at RMB200 million. This extension, classified as a major transaction, requires shareholder approval and highlights the company’s ongoing financial engagements and strategic positioning in managing its financial resources.

Kunming Dianchi Water Treatment Co., Ltd. Restructures Governance Framework

Kunming Dianchi Water Treatment Co., Ltd. announced significant corporate governance changes, including the abolition of its Board of Supervisors. The responsibilities of this board will now be handled by the Audit Committee, leading to amendments in the company’s Articles of Association and related procedural rules. These changes, driven by updates in Chinese Company Law and other regulations, also involve the resignation of current supervisors, contingent on shareholder approval. The company also plans to transfer a substantial portion of shares to Yunnan Yuntou Financial Leasing Co., Ltd. as part of a debt settlement, impacting the shareholding structure.

Kunming Dianchi Faces Share Freeze Amidst Legal Challenges

Kunming Dianchi Water Treatment Co., Ltd. announced that its controlling shareholder, Kunming Dianchi Investment Co. Ltd., has had its shares frozen due to enforcement actions by the Huaiji People’s Court of Guangdong. This freeze, valued at RMB18 million, is part of a broader series of legal and financial challenges faced by the controlling shareholder, affecting a significant portion of the company’s equity. The freezing of shares could impact the company’s financial stability and market operations, as it restricts the transfer and management of a substantial portion of its equity.