China Water Affairs Group

HK: 855

HKD11712.8m market cap

HK$7.28 last close

China Water Affairs (CWA) is a pioneer in the privatisation of water supply assets in China. The company seeks to create growth via volume/price increases.

Investment summary

Although FY19 revenue was below expectations, it was offset by higher than expected margins in the water supply business and a lower tax charge, allowing EPS to beat our forecast. China Water Affairs Group’s (CWA’s) 2013–19 compound annual growth rate (CAGR) in EPS now stands at over 27% and the group remains positive about its prospects. The current rating is undemanding for a company with CWA’s growth prospects.

Y/E Mar
Revenue (HK$m)
EBITDA (HK$m)
PBT (HK$m)
EPS (c)
P/E (x)
P/CF (x)
2018A 7580.0 3097.0 2462.0 71.8 10.1 N/A
2019A 8302.0 3507.0 2772.0 85.1 8.6 N/A
2020E 9703.0 4174.0 3358.0 96.8 7.5 N/A
2021E 11323.0 4860.0 3907.0 112.6 6.5 N/A
Last updated on 25/07/2019
Industry outlook

Water supply in China remains fragmented. The central government encourages local governments to deleverage their own balance sheets with private–public partnerships. This trend remains positive for CWA.

Last updated on 25/07/2019
Sector
Industrials
Share price graph
Balance sheet
Forecast net debt (HK$m) 12512
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (6.8) (11.5) (27.3)
Relative* (8.1) (8.6) (26.5)
52-week high/low HK$10.5/HK$7.0
*% relative to local index
Key management
Duan Chuan Liang Chairman
Liu Yu Jie Executive director
Ding Bin Executive director
Li Zhong Executive director