此次建议分派前，公司持有粤海置地73.72%股权。根据公告，公司将分派特别股息，分派方式为派发粤海投资直接持有的12.62亿股粤海置地股票（约占粤海置地股本的73.72%），具体分派比例为每一股粤海投资股票分派0.193股粤海置地股票。通过本次分派，大股东粤海控股持有粤海投资58.26%股权不变，同时粤海投资将不再持有粤海置地股权，粤海置地将与公司成为兄弟公司。SWHY released a research report stating to maintain a "Buy" rating for GUANGDONG INV (00270). Given that the divestiture plan still requires approval from the special general meeting of shareholders (scheduled for January 8, 2025), the profit forecast for the company for 2024-2026 is maintained at 4.003/4.101/4.12 billion HK dollars. The bank believes that the company's Water Affairs core business is developing steadily, and the quality of the core Dongjiang water assets is high. With the divestiture of the real estate business, the company’s performance and valuation are expected to improve significantly. Additionally, on December 9, the company announced a proposal to distribute a special dividend in the form of shares of GD LAND.
The main points of SWHY are as follows:
The plan for the special dividend involves divesting the real estate business, and in the future, GUANGDONG INV will no longer Hold GD LAND, focusing on the Water Affairs core business.
Before this proposed distribution, the company held 73.72% equity in GD LAND. According to the announcement, the company will distribute a special dividend by distributing 1.262 billion stocks of GD LAND directly held by GUANGDONG INV (approximately 73.72% of GD LAND's equity). The specific distribution ratio is 0.193 shares of GD LAND stock for each stock of GUANGDONG INV. Through this distribution, the major shareholder GD Holdings will still hold 58.26% equity in GUANGDONG INV, while GUANGDONG INV will no longer hold equity in GD LAND, making GD LAND a sibling company to the company.
After divesting GD LAND, the operating performance and overall value of GUANGDONG INV are expected to significantly improve.
According to the company's announcement, in 2023, the net income attributable to shareholders of the company dropped significantly by 34% year-on-year to 3.12 billion HK dollars. The decline in profit was mainly affected by a real estate impairment of 1.81 billion HK dollars under GD LAND. If excluding the impact of real estate impairment, the company’s main business profit in 2023 would reach 4.93 billion HK dollars. Upon completion of the divestiture, the company's future performance will no longer be affected by the fluctuations of the real estate business.
After divesting GD LAND, the company’s debt ratio is expected to decrease significantly.
According to the company's announcement, as of the first half of 2024, GUANGDONG INV has total assets of 139.8 billion HK dollars, total liabilities of 80.6 billion HK dollars, and net assets of 59.3 billion HK dollars, with a debt ratio of 58%; GD LAND has total assets of 46.9 billion HK dollars, total liabilities of 40.7 billion HK dollars, and net assets of 6.2 billion HK dollars, with a debt ratio of 87%; in the future, with the higher leveraged GD LAND being divested, the company's debt ratio is expected to decrease significantly.
After deducting GD LAND, the company's operating cash flow is steadily improving.
According to the company's announcement, in 2023, the operating cash flow from business activities is 10.71 billion Hong Kong dollars, of which the net operating cash flow of GD LAND is 3.61 billion Hong Kong dollars. After excluding GD LAND, the company's operating cash flow is 7.1 billion Hong Kong dollars. For the first half of 2024, the company's operating cash flow is 4.88 billion Hong Kong dollars, with the net operating cash flow of GD LAND at 1.29 billion Hong Kong dollars, resulting in 3.59 billion Hong Kong dollars after excluding GD LAND, showing continuous stable improvement.
The dividend payout ratio for the first half of 2024 is 65%, maintaining stability compared to the 2023 dividend payout ratio.
According to the company's announcement, in 2023, the company adopted a new dividend policy, reducing the payout ratio from 84% in 2022 to 65% in 2023. For 2024, the company announced a proposed interim dividend of 23.97 Hong Kong cents, maintaining an interim cash dividend ratio of 65%, consistent with that of 2023.
Risk warning: The special dividend plan has not been approved, along with risks related to risk, renewal of the Dongshen project, and foreign exchange risks.
