China Water Affairs Group Full Year 2024 Earnings: Misses Expectations

China Water Affairs Group (HKG:855) Full Year 2024 Results

Key Financial Results

• Revenue: HK$12.9b (down 9.4% from FY 2023).
• Net income: HK$1.53b (down 17% from FY 2023).
• Profit margin: 12% (down from 13% in FY 2023). The decrease in margin was driven by lower revenue.
• EPS: HK$0.94 (down from HK$1.14 in FY 2023).

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

China Water Affairs Group Revenues and Earnings Miss Expectations

Revenue missed analyst estimates by 13%. Earnings per share (EPS) also missed analyst estimates by 18%.

The primary driver behind last 12 months revenue was the City Water Supply Operation and Construction segment contributing a total revenue of HK$8.34b (65% of total revenue). Notably, cost of sales worth HK$8.08b amounted to 63% of total revenue thereby underscoring the impact on earnings. The most substantial expense, totaling HK$2.33b 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 855's revenue and expenses shape its earnings.

Looking ahead, revenue is forecast to grow 4.2% p.a. on average during the next 3 years, compared to a 6.4% growth forecast for the Water Utilities industry in Asia.

Performance of the market in Hong Kong.

The company's shares are down 2.9% from a week ago.

Risk Analysis

Be aware that China Water Affairs Group is showing 2 warning signs in our investment analysis and 1 of those doesn't sit too well with us...

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