Understanding the Market | BJ ENT WATER Group rose more than 6% intraday, with the company's high dividend expectations stable. Citi believes that the interest rate cut cycle is beneficial for utility stocks

Beijing Enterprises Water Group rose more than 6% intraday, up 5.07% as of the time of publication, at HKD 2.28, with a turnover of HKD 70.9691 million. On the news front, Beijing Enterprises Water Group previously released its interim results, with operating income of RMB 11.309 billion, a year-on-year decrease of 6.41%; attributable net profit to shareholders was RMB 1.122 billion, a year-on-year decrease of 18.08%; proposing an interim dividend of 7 HK cents per share, unchanged year-on-year, with a dividend payout ratio of 60%. Guotai Junan pointed out that the company is the industry leader in the national scale of production capacity in the water treatment industry, with stable growth in sewage and water supply businesses; capital expenditure has entered a downward cycle, cash flow has improved, stable high dividends, and high dividend characteristics are obvious, and is expected to undergo value revaluation. In addition, the Federal Reserve recently announced a 50 basis point rate cut. Citigroup previously stated that the rate cut cycle is expected to benefit Hong Kong utility stocks, which historically have a high correlation with US Treasury yields. The bank pointed out that with the 10-year US Treasury yield at 3.9%, the bank believes that stocks with a forecasted yield of over 5% and high profit visibility are attractive, including Beijing Enterprises Water Group