Beijing Enterprises Water Group Full Year 2023 Earnings: Misses Expectations

Beijing Enterprises Water Group (HKG:371) Full Year 2023 Results

Key Financial Results

• Revenue: CN¥24.5b (up 14% from FY 2022).
• Net income: CN¥1.83b (up 60% from FY 2022).
• Profit margin: 7.4% (up from 5.3% in FY 2022). The increase in margin was driven by higher revenue.
• EPS: CN¥0.18 (up from CN¥0.11 in FY 2022).

All figures shown in the chart above are for the trailing 12 month (TTM) period

Beijing Enterprises Water Group Revenues and Earnings Miss Expectations

Revenue missed analyst estimates by 15%. Earnings per share (EPS) also missed analyst estimates by 24%.

The primary driver behind last 12 months revenue was the Sewage and Reclaimed Water Treatment and Construction Services segment contributing a total revenue of CN¥14.0b (57% of total revenue). Notably, cost of sales worth CN¥15.5b amounted to 63% of total revenue thereby underscoring the impact on earnings. The most substantial expense, totaling CN¥3.92b were related to Non-Operating costs. This indicates that a significant portion of the company's costs is related to non-core activities. Explore how 371's revenue and expenses shape its earnings.

Looking ahead, revenue is forecast to grow 3.9% p.a. on average during the next 3 years, compared to a 7.4% growth forecast for the Water Utilities industry in Asia.

Performance of the market in Hong Kong.

The company's shares are up 4.8% from a week ago.

Risk Analysis

You should learn about the 3 warning signs we've spotted with Beijing Enterprises Water Group (including 1 which shouldn't be ignored).

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