Citigroup: Maintains "Buy" rating on Beijing Enterprises Water Group Limited (00371) with a target price lowered to 2.7 Hong Kong dollars.

Citibank released a research report stating that it has slightly lowered the target price of Beijing Enterprises Water Group Limited (00371) from HK$2.8 to HK$2.7, maintaining a "buy" rating. In addition, they have initiated a 90-day observation period for negative catalysts, with expectations that earnings for 2024 may fall short of expectations. According to the report, the company's 2024 net profit forecast has been lowered by 10%, as they anticipate more impairment losses due to delayed government payments for water renovation projects. The bank has also lowered the net profit forecasts for this year and next year by 11%, taking into consideration the reduction in income from selling technology projects by the end of 2024, as well as the impact of weak demand on urban resource services. Despite Citibank's expectation of a 5% year-on-year decline in Beijing Enterprises Water Group's 2024 net profit, the company still plans to maintain an annual dividend per share of HK$0.157. With capital expenditures expected to decrease from 60 billion RMB in 2024 to 30-40 billion RMB in 2026, free cash flow is expected to improve, which will help to maintain its dividend. The expected dividend yield for 2024 is 6.7%.