Beijing Enterprises Holdings Sees Decent Profit Growth in First Half, Shares Remain Undervalued

Beijing Enterprises Holdings’ 29% year-over-year rise in recurring net profit to HKD 4.60 billion was in line with our expectations, with decent growth across major segments that include piped gas, water treatment, waste management and its brewery. This reflects a recovery from the coronavirus impact, with core profit returning to the prepandemic level as activity normalized. We maintain our earnings forecasts and fair value estimate of HKD 44.50 per share. We expect Beijing Enterprises' full-year recurring net profit to rise 10.20% to HKD 7.90 billion and grow at a CAGR of 7.10% between 2021 and 2025.