HK Stock Market Move | BJ ENT WATER (00371) up over 6% intra-day, company's high dividend expectations remain stable. Citi says rate cut cycle benefits utilities stocks.

BJ ENT WATER (00371) rose more than 6% in intraday trading, and as of the time of writing, it is up 5.07% at 2.28 Hong Kong dollars, with a turnover of 70.9691 million Hong Kong dollars. In terms of news, BJ ENT WATER had previously released its mid-year performance, with operating income of 11.309 billion yuan, a decrease of 6.41% year-on-year; attributable net profit to shareholders was 1.122 billion yuan, a decrease of 18.08% year-on-year; proposing an interim dividend of 7 Hong Kong cents per share, flat year-on-year, with a payout ratio of 60%. Guotai Junan pointed out that the company is the industry leader in the national water treatment industry in terms of production capacity, with stable growth in sewage and water supply businesses; capital expenditure is entering a downturn cycle, cash flow is improving, stable high dividends, and a high dividend characteristic, which is expected to lead to a revaluation of its value. In addition, the Federal Reserve recently announced a 50 basis point rate cut. Citigroup previously stated that it expects a rate cut cycle to benefit Hong Kong utility stocks, as the prices of the latter have historically been highly correlated with US Treasury bond yields. The bank pointed out that with the US 10-year Treasury bond yield at 3.9%, it considers stocks with a predicted yield of over 5% and high profit visibility to be attractive, including Beijing Enterprises Water Group.