In line FY21 results
■ China Water Affairs (CWA) reported satisfactory FY21 results, in line with our
expectations.
■ Its water supply-related business reported resilient yoy revenue growth, and waste water treatment also reported faster yoy growth in 2HFY21.
■ The less positive point about the Company’s FY21 results was the yoy increase in the net gearing ratio, which the Company aims to lower in the coming years.
■ At 5.0x FY22F P/E and 4.4x FY23F P/E, and with a yield of over 5.9%, CWA’s
valuation looks attractive. We maintain our ADD rating, with a new target price of HK$8.29 (up from HK$8.19), based on 8x FY22F P/E, which is in line with its
historical average.