Beijing Enterprises Water Group Limited

For 2024, BEWG reported main business revenue of RMB24.27 billion, down 1% year on year, and net profit attributable to parent of RMB1.68 billion, down 12%. Expected operating cash flow was RMB2.07 billion, and free cash flow was a net inflow of RMB1.48 billion, up 35% from 2023. The annual dividend was HKD16.1 cents per share, up 2.55%, with an indicated yield of around 7% based on the March 26, 2025 closing price. Segmentally, sewage and reclaimed water treatment revenue was RMB8.75 billion (+7%) with gross profit margin at 57% (+2 pts), water supply revenue was RMB2.53 billion (+2%) with gross margin at 40% (-5 pts), overseas project revenue was RMB907 million (flat) with gross profit at 22% (-2 pts), construction service revenue was RMB830 million (flat) with gross profit at 18% (-10 pts), BOT construction revenue was RMB2.62 billion (-42%) with gross profit at 17% (flat), technical service and machinery sales revenue was RMB2.55 billion (+4%) with gross profit at 42% (-1 pt), and urban resource services revenue was RMB6.03 billion (+19%) with gross profit at 19% (-1 pt). Capex was RMB4.11 billion, down 41%; overheads were RMB3.07 billion, down 7%; financial expenses were RMB3.09 billion, down 5%; cash and cash equivalents were about RMB9 billion; and the net liability ratio rose to 119%, up 1 percentage point. For 2025, management guided to revenue roughly flat versus 2024, water main business revenue up about 5%, construction revenue down about 40%, technical service and machinery sales up about 5%, urban resource services up about 10%, and net profit attributable to parent of RMB1.5 billion. Capex is expected at around RMB5 billion, the net liability ratio is targeted within 140%, and management said free cash flow should be around RMB2 billion and improve by about 10% annually over time.

Management’s tone was constructive but cautious, emphasizing a 2025 “key year” for consolidating operations and improving cash flow and profitability. The strategic message was to keep reducing reliance on heavy-asset BOT projects and expand commissioned-operation and light-asset work, while also pushing digital tools, centralized management, and talent development. They repeatedly stressed that receivables collection is a priority and that better cash collection from governments could support stronger revenue, profit, and dividends.

The financial commentary centered on margin mix, capex discipline, and funding costs. The company said capex dropped to RMB4.11 billion from a lower-investment transition away from BOT, overheads fell 7% to RMB3.07 billion, financial expenses fell 5% to RMB3.09 billion, and the comprehensive financing cost ended the year around 4%, down 28 bps. Cash and cash equivalents were about RMB9 billion, but the net liability ratio was 119%, up 1 point, and management warned that asset impairment was RMB800 million in 2024 and could stay at that level in 2025 if local fiscal conditions do not improve.

Analysts focused on dividends, cash collection, water pricing, impairment, and the outlook for urban resources and water environment projects. Management said the dividend can keep improving as free cash flow strengthens, but the payout level is not capped yet and depends on cash flow; they also said receivables were under pressure because local governments faced fiscal constraints. On water pricing, management said 2024 price increases slowed, but they remain optimistic for 2025 and are working on water price adjustments for about 1.2 million tons per day, though approval still depends on local governments. They also said 2024 debt-resolution funds of RMB900 million were received and RMB7.66 billion has been included in the Ministry of Finance’s debt-resolution pool.