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Beijing Enterprises Holdings Ltd 00392 Stock Quote

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Morningstar‘s Stock Analysis 00392

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Is it the right time to buy or sell?

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BEH’s 1H 2022 Beats Expectations; 25% Interim DPS Growth Drives an Attractive Dividend Yield

Jennifer Song Senior Equity Analyst

Analyst Note

| Jennifer Song |

Beijing Enterprises’, or BEH’s, 10.8% year-over-year growth in first-half 2022 recurring net profit to HKD 5.5 billion slightly beat our expectations, mainly attributable to better contribution from its Russian upstream business, boosted by higher oil prices and the appreciation of the ruble. Coupled with higher natural gas sales, profit contribution from gas operation was up 23.6% year over year. We raise our 2022 recurring net profit forecast by 10% to CNY 8.9 billion, after updating our oil prices and foreign exchange assumptions. Our midcycle outlook remains unchanged, and we retain our forecast that the company’s recurring net profit will grow at a five-year CAGR of 3.5% through 2021-26. Our fair value estimate is maintained at HKD 39.50 per share, and we continue to believe the shares are undervalued currently, trading at only 0.3 times of price/book—a significant discount relative to its underlying assets.

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Key Statistics 00392

Company Profile 00392

Business Description

Beijing Enterprises Holdings was founded in 1997 and it is the listed flagship of the Beijing municipal government. It has a diversified business portfolio with focus on public utilities, including gas distribution and transmission, sewage and water treatment, and waste-to-energy business. It also invests in an upstream Russia oil and gas company, and owns 80% of Yanjing Brewery, one of the leading domestic brewers. The business mix is approximately two thirds in gas transmission and distribution, with the rest in water, waste treatment, upstream oil and gas, and beer businesses.

18 Harbour Road, 66th Floor, Central Plaza
Hong Kong, Hong Kong
T +852 29152898
Industry Conglomerates
Most Recent Earnings
Fiscal Year End Dec 31, 2022
Employees 37,000