《Beijing Enterprises Water》.pdfVIP

Asia Pacific Equity Research 05 September 2013 O erweight Beijing Enterprises Water 0371.HK, 371 HK Price: HK$3.33 Why it can keep buying and growing Price Target: HK$3.80 Beijing Enterprises Water ’s rapid capacity growth via MA has triggered China investor concerns on its funding capability and management’s ability to Utilities absorb so many projects. Below are our thoughts on these questions and Elaine Wu AC the reasons why we think these should not be a concern. Reiterate OW. (852) 2800-8575 elaine.wu@  Will the company need to issue equity to support growth? BEW’s net Bloomberg JPMA EW U GO gearing of 98% will likely rise to ~120% after the completion of the two Boris Kan recently announced acquisitions. Fundamentally, that gearing level is not (852) 2800-8573 high considering it’s backed by ~30 years of stable cash flow from water bo