Jinwu Financial News | Guangdong Investment (00270) had a strong stock price in early trading. As of press release, it was HK$5.69, up 9%, with a turnover of HK$0.242 billion.
According to the news of the purchase, the company proposed to pay a special dividend by physically distributing Guangdong Land (00124) shares. The benchmark is to receive 0.193 Guangdong Land shares for each share held, involving the distribution of 1.261 billion shares, accounting for about 73.72% of Guangdong Land's share capital. Guangdong Investment plans to divest the property development business owned by Guangdong Land Group through a proposal to streamline business activities and concentrate resources on core business to maintain stable business development.
Citi is optimistic about this move because it believes that the deal will improve the profit visibility of Guangdong Investment and that the Group's financial situation will also improve due to a reduction in the balance to liability ratio. At the same time, Citi believes that the yield of investment in Guangdong in 2025 is 7.6%, the highest public stock in Hong Kong, and is very attractive. As a result, the bank upgraded the Guangdong investment rating from “neutral” to “buy” and raised the target price by 25% from HK$4.8 to HK$6.
