<div id="readability-page-1"><div><p>China Water Affairs Group (SEHK:855) has launched an additional US$150,000,000 in 5.875% senior notes due 2030, aiming to refinance offshore debt and fund eligible green water supply projects under its Green &amp; Blue Finance Framework.</p> <p>See our latest analysis for China Water Affairs Group.</p> <p>At a share price of HK$5.12, China Water Affairs Group has seen its short term momentum pick up, with a 1 month share price return of 4.28% and a 7 day gain of 2.40%. However, the 1 year total shareholder return is down 10.68%, so the recent debt and green financing moves are set against a longer term performance profile that is still recovering.</p> <p>If this blend of infrastructure funding and green projects interests you, it could be a good moment to scan for other utilities and infrastructure names through the 36 power grid technology and infrastructure stocks</p> <p>With the stock still down over 10% on a 1 year view and trading below some valuation estimates, the key question is whether China Water Affairs Group is quietly undervalued, or if the market is already pricing in future growth.</p> <h2>Price-to-Earnings of 9.4x: Is It Justified?</h2> <p>On a P/E of 9.4x at a last close of HK$5.12, China Water Affairs Group screens as inexpensive compared to both its own fair P/E estimate and water utility peers.</p> <p>The P/E multiple compares the current share price to earnings per share and is a common way investors weigh how much they are paying for each unit of profit. For a regulated, earnings generating utility group with multiple segments across water supply, environmental protection and related services, this lens helps you see whether the current price lines up with the profit profile analysts expect.</p> <p>China Water Affairs Group is described as trading at good value versus an estimated fair P/E of 10.6x and is also seen as good value against a peer average P/E of 9.5x and the broader Asian water utilities average of 14.8x. That mix suggests the market is applying a lower earnings multiple than both what regression based fair ratio work points to and what investors are willing to pay for similar companies. This leaves some room for the valuation multiple to move closer to those levels if sentiment, earnings or both change over time.</p> <p>Compared with the Hong Kong water utilities industry 1 year return of 22.1% and the Hong Kong market 1 year return of 19.7%, China Water Affairs Group’s share price has declined 10.68%, so the current 9.4x P/E sits against a period of weaker recent returns. Analysts collectively see earnings growing 11.96% per year from here.</p> <p>Explore the SWS fair ratio for China Water Affairs Group</p> <p><strong>Result: Price-to-Earnings of 9.4x (UNDERVALUED)</strong></p> <p>However, you also need to weigh risks such as declining annual revenue growth and the stock’s weak 1 year and 3 year total returns before relying on the low P/E ratio.</p> <p>Find out about the key risks to this China Water Affairs Group narrative.</p> <h2>Another View: What Does The Cash Flow Say?</h2> <p>Our DCF model points to a fair value of about HK$6.99 per share, which is roughly 26.7% above the current HK$5.12 price and implies China Water Affairs Group appears undervalued on this basis as well. The question is whether you place more weight on the earnings multiple or the cash flow model.</p> <p>Look into how the SWS DCF model arrives at its fair value.</p> <figure><img height="476" src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/ba121f01-6d1e-4a61-b546-e26d4a8ddb0e/chart/dcf/query-ZGF0ZT0yMDI2LTA1LTEy?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="746" original-src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/ba121f01-6d1e-4a61-b546-e26d4a8ddb0e/chart/dcf/query-ZGF0ZT0yMDI2LTA1LTEy"/><figcaption>855 Discounted Cash Flow as at May 2026</figcaption></figure><p>Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out China Water Affairs Group for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 231 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.</p> <h2>Next Steps</h2> <p>Balancing those risks and rewards comes down to your own comfort with the story, so move quickly to review the details, weigh both sides and see the 4 key rewards and 3 important warning signs</p> <h2>Looking for more investment ideas?</h2> <p>If you are serious about building a stronger portfolio, do not stop at one company. Use focused stock lists to uncover opportunities that fit your goals before others do.</p> <ul> <li>Target potential mispricing by scanning companies that combine quality fundamentals with attractive valuations via the 231 high quality undervalued stocks.</li> <li>Prioritise resilience by focusing on companies with stronger financial footing using the solid balance sheet and fundamentals stocks screener (389 results).</li> <li>Spot potential early movers by reviewing a screener containing 540 high quality undiscovered gems that many investors may not be watching yet.</li> </ul> <p><em> This article by Simply Wall St is general in nature. <strong>We provide commentary based on historical data         and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice.</strong> It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your         financial situation. We aim to bring you long-term focused analysis driven by fundamental data.         Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.         Simply Wall St has no position in any stocks mentioned.</em></p><div><h3><strong>New: </strong>AI Stock Screener &amp; Alerts</h3><p>Our new AI Stock Screener scans the market every day to uncover opportunities.</p><div><p>• Dividend Powerhouses (3%+ Yield)<br/>• Undervalued Small Caps with Insider Buying<br/>• High growth Tech and AI Companies</p><p>Or build your own from over 50 metrics.</p></div><p>Explore Now for Free</p></div></div></div>

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<p>China Water Affairs Group (SEHK:855) has issued US$150 million in 5.875% senior notes due 2030 to refinance debt and fund green projects. The stock is currently priced at HK$5.12, showing a short-term gain of 4.28% over one month, but a 10.68% decline over the past year. With a P/E ratio of 9.4x, it appears undervalued compared to its fair estimate of 10.6x and peers. Analysts project an 11.96% annual earnings growth, while a DCF model suggests a fair value of HK$6.99 per share, indicating potential upside.</p>

China Water Affairs Group (SEHK:855) Valuation Check As New Green Senior Notes Are Issued