HK Stock Market Move | BJ ENT WATER (00371) fell more than 4%, with Citi predicting that its annual profit will be below expectations. Lower capital expenditures will help maintain dividends.

BJ ENT WATER (00371) fell more than 4% in the afternoon, falling by 4.22% to 2.27 Hong Kong dollars, with a turnover of 79.9895 million Hong Kong dollars as of the reporting time. Citigroup published a research report indicating that it has lowered its net profit forecast for Beijing Enterprises Water Group in 2024 by 10%, as it is expected that there will be more impairment losses due to the government's delay in paying accounts receivable for water renovation projects. The bank also lowered its net profit forecast for the current and next year by 11%, taking into account the decrease in revenue from selling technology projects at the end of 2024, and the impact of weak demand on urban resource services. The bank stated that it has initiated a 90-day negative catalyst observation and expects that the profit in 2024 may fall short of expectations. The bank predicts that Beijing Enterprises Water Group's net profit will decrease by 5% in 2024 compared to the previous year. Beijing Enterprises Water Group still plans to maintain the annual dividend at 0.157 Hong Kong dollars per share. With capital expenditures expected to decrease from 60 billion RMB in 2024 to 30-40 billion RMB by 2026, free cash flow is expected to improve, which will help maintain its dividend, with an expected dividend yield of 6.7% in 2024.