Bank of America Securities released a research report stating that it upgraded the rating of Guangdong Investment (00270) from “neutral” to “buy”. The net profit for the 2024 fiscal year is expected to remain flat year over year, with an average compound annual growth rate of 11% from 2025 to 2026, while dividend rates from 2024 to 2026 are attracted by more than 6.8%, 7.8%, and 8.3%, respectively. Earnings per share were also reduced by 4%, 15% and 15% from 2024 to 2026, and the target price was raised from HK$4.9 to HK$5.2.
According to the report, Guangdong Investment management will discuss the possibility of paying a special dividend on December 9 to enhance investor confidence. If approved, the bank expects to reach 7 cents per share, but no matter how much the final special interest is, it is believed that the dividend per share in 2024 will not fall below the level of 2023.
Furthermore, the bank believes that Guangdong Investment's real estate project in Baiyun District of Guangzhou will begin to be delivered and revenue confirmed by the end of 2024. The group has collected 10 billion yuan in pre-sale payments for the project, with an estimated gross margin of about 25%. The project is expected to contribute more than 2.5 billion yuan in gross profit over two years.
