Bank of America Securities predicts that the dividend of EB ENVIRONMENT (00257) will continue to rise, raising the target price to HK$6.8.

Bank of America Securities released a research report stating that EB ENVIRONMENT (00257) is projected to have a net profit of HK$3.9 billion by 2025, which is 6% higher than the bank's expectations. The final dividend is expected to increase by 3 HK cents year-on-year to 12 HK cents per share, surpassing the bank's forecast by 20%. The bank reiterates its "buy" rating, as it expects the free cash flow from 2026 to 2028 to remain at a high level of about HK$9 billion, with low capital spending becoming the new norm. After deducting financing costs, the free cash flow yield is expected to reach 20%. The bank forecasts a dividend yield of 6% by 2026, which is attractive; and it has raised its target price from HK$6.2 to HK$6.8. Furthermore, with earnings per share growth and strong support from free cash flow, the bank expects dividends to continue to rise, and the management also reaffirms its commitment to shareholder returns. The suggestion of issuing A-shares for listing may lead to a revaluation of the company's valuation.