HK Stock Market Move | Beijing Enterprises Water Group (00371) rose by more than 3% again, with institutions pointing out that the company is expected to benefit from the cash flow improvement brought by debt-for-equity swap policies in the future.

Beijing Enterprises Water Group (00371) rose by more than 3% again, with an increase of 2.52% as of the time of publication, reaching HK$2.44, with a turnover of HK$15.46 million. Huatai released a research report stating that Beijing Enterprises Water Group has persisted in its light asset transformation, with a net free cash flow of RMB 37 million in the first half of the year, turning from negative to positive on an annual basis. Although there may be some pressure on short-term receivables, the collection of water operation receivables is closely related to the government's fiscal payment ability, and it is expected to benefit from the improved cash flow brought by the debt-for-equity policy in the future. With a stable dividend policy, the dividend yield is 6.6%, which is attractive. The bank believes that under the debt-for-equity policy and the trend of user pay, the company's future cash flow is expected to further grow, laying a solid foundation to reward shareholders. However, due to the depreciation risk brought about by the short-term receivables pressure, it is expected that the company's net profit attributable to equity shareholders for the years 2024 to 2026 will be RMB 1.876 billion, RMB 2.119 billion, and RMB 2.293 billion respectively, representing a decrease of 6.34%, 8.35%, and 8.55% compared to previous values, with corresponding earnings per share of RMB 0.19, RMB 0.21, and RMB 0.23 respectively.