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

• Market Cap: HK$740.96M
• Dividend Yield: N/A
• Average Volume (3M): 221.20K
• Price to Earnings (P/E): 2.6
• Beta (1Y): 0.60
• Revenue Growth: -13.42%
• EPS Growth: -18.54%
• Country: HK
• Employees: 1,115
• Sector: Utilities
• Sector Strength: 86
• Industry: Regulated Water
• EPS (TTM): 0.12
• Shares Outstanding: 340,023,000
• 10 Day Avg. Volume: 40,100
• 30 Day Avg. Volume: 221,200
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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$1.00
• Price Target Upside: 38.89% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 68 Neutral
• Price Target: HK$1.00 ▲(38.89% Upside)

Kunming Dianchi Water Treatment Co., Ltd. Class H exhibits strong technical momentum and appears undervalued based on its low P/E ratio. However, financial performance shows moderate stability with risks related to declining revenue, profitability, and leverage. Investors should be cautious of the overbought signals in technical analysis that may indicate a short-term price correction.

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

Company Description

Kunming Dianchi Water Treatment Co., Ltd., listed as Class H (3768), is a prominent player in the environmental protection sector, primarily focusing on water treatment and management. The company specializes in providing comprehensive water treatment solutions, including wastewater treatment, water purification, and related environmental services, contributing to sustainable water resource management in the regions it operates.

How the Company Makes Money

Kunming Dianchi Water Treatment Co., Ltd. generates revenue primarily through the provision of water treatment services and environmental solutions. The company's key revenue streams include fees from wastewater treatment services, charges for water purification processes, and income from environmental consulting services. Additionally, the company may engage in strategic partnerships with municipal governments and industries to implement large-scale water treatment projects, which can significantly boost its earnings. By offering a range of services tailored to meet regulatory and environmental standards, Kunming Dianchi Water Treatment Co., Ltd. ensures a steady flow of revenue while contributing to the ecological well-being of the communities it serves.

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: 0.72
• 50DMA: Positive
• 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:3768, the sentiment is Positive. The current price of 0.72 is above the 20-day moving average (MA) of 0.68, above the 50-day MA of 0.64, and above the 200-day MA of 0.63, indicating a bullish trend. The MACD of 0.02 indicates Negative momentum. The RSI at 68.22 is Neutral, neither overbought nor oversold. The STOCH value of 75.76 is Neutral, 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
6136	72 Outperform	€834.50M	4.58	2.85%	―	0.08%	31.12%
3768	68 Neutral	HK$740.96M	2.60	5.17%	―	-13.42%	-18.54%
Sector *	63 Neutral	HK$29.34B	8.52	5.80%	4.90%	-3.44%	2.46%
6839	51 Neutral	HK$266.09M	―	-151.78%	―	-11.84%	-150.45%
1129	49 Neutral	HK$199.14M	―	-33.47%	―	-26.87%	-53.44%
1542	46 Neutral	HK$71.50M	―	-11.64%	5.16%	-2.67%	-11.08%

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

Kunming Dianchi Water Treatment Issues Profit Warning for H1 2025

Kunming Dianchi Water Treatment Co., Ltd. has issued a profit warning, indicating a decrease in its pre-tax profit and profit attributable to equity holders for the first half of 2025 compared to the same period last year. The decline is attributed to the absence of investment income from the sale of subsidiaries, which was recorded in the previous year, and the overall reduction in profit following the sale of these subsidiaries. The company is in the process of finalizing its unaudited financial results, and stakeholders are advised to exercise caution when trading shares.

Kunming Dianchi Water Treatment Co., Ltd. Announces Director Changes

Kunming Dianchi Water Treatment Co., Ltd. announced the intended resignation of Mr. Zhang Yang as a non-executive director due to changes in work arrangements. The company has proposed the appointment of Ms. Gao Yuan as a non-executive director and Ms. Lian Zhaoju as an executive director, both subject to approval by relevant authorities and shareholders. These appointments are aimed at ensuring a smooth transition and maintaining effective governance within the company.

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.