中泰国际每日晨讯-2025-03-17

Investment Rating - The report assigns a "Buy" rating to 361 Degrees (1361 HK) with a target price of HKD 5.67, indicating a potential upside of 26.3% [6][9] - The report also gives a "Buy" rating to China Water Affairs (855 HK) with a target price of HKD 7.22, suggesting a potential upside of 24.1% [12][15] Core Insights - 361 Degrees reported a FY24 net profit increase of 15.4% to RMB 1.15 billion, with a revenue of RMB 10.07 billion, reflecting a 19.1% year-on-year growth [6][9] - China Water Affairs expects a significant increase in sewage treatment revenue, projected to rise by 76.8% to HKD 320 million in the first half of FY25, driven by a new contract with ExxonMobil [12][15] - The report highlights a trend of rising water prices due to market-oriented policies, with several cities already initiating price adjustments [13][15] Summary by Sections 361 Degrees (1361 HK) - The company plans to increase its annual dividend payout ratio to 45% and has seen a stable gross margin of 41.5% despite rising costs [6][9] - The company is expanding its retail footprint with the introduction of "super premium" stores, aiming to increase the number from 5 to 100 by the end of 2025 [8] - Inventory levels have risen significantly, impacting cash flow, but management expects improvements in inventory turnover in the coming quarters [7] China Water Affairs (855 HK) - The company is benefiting from a new sewage treatment project with ExxonMobil, which is expected to enhance revenue significantly [12] - The report notes that the company is likely to increase its dividend payout ratio to at least 30% due to reduced capital expenditure [14] - The overall economic stability in China is expected to enhance the attractiveness of public utility stocks, leading to higher valuations [15]