GF Securities: Maintaining Guangdong Investment's (00270) “Buy” Rating Reasonable Value HK$11.24 Expected Dividend Rate of 6.2% in 2026

The Zhitong Finance App learned that GF Securities released a research report stating that it maintains the “buy” rating of Guangdong Investment (00270), referring to the 15 times price-earnings ratio (PE) given by the same company in 2026, corresponding to a reasonable value of HK$11.24 per share. The bank estimates that the company's net profit from 2026 to 2028 will be HK$4.90 billion, $5.01 billion and HK$5.14 billion, respectively. The company's revenue from continuing operations for the first three quarters of 2026 was HK$15.711 billion, up 10.0% year on year; net profit to mother was HK$4.362 billion, up 7.3% year on year, and performance increased steadily. The bank estimates a dividend rate of 6.2% based on the 65% dividend ratio and 2026 profit forecast.

The main views of GF Securities are as follows:

The company's performance is growing steadily, and the dividend rate is estimated to be 6.2% in 2026

In the first three quarters of 2026, the company's revenue from continuing operations was HK$15.711 billion, up 10.0% year on year; net profit to mother was HK$4.362 billion, up 7.3% year on year, and net profit from continuing operations increased 6.8% year on year. Revenue for the third quarter of 2026 was HK$5.494 billion, up 13.2% year on year; net profit to mother was HK$1,426 million, up 3.0% year on year. The increase in performance was mainly due to steady growth in the water resources business, a decline in net financial expenses, revenue of HK$119 million from the sale of associated companies, and conversion revenue driven by RMB appreciation. Among them, net financial expenses decreased by 23.6% year over year to HK$201 million.

The company paid HK$1.91 billion in dividends for the first half of 2026, accounting for 65% of net profit attributable to mother, maintaining the dividend ratio from 2023 to 2025. The bank estimates a dividend rate of 6.2% based on the 65% dividend ratio and 2026 profit forecast.

The water resources sector is still the cornerstone of profit, and other water resources projects have achieved relatively rapid growth

In the first three quarters of 2026, the total water supply volume of the Dongshen Water Supply Project was 1,569 million tons, a year-on-year decrease of 6.0%; revenue to Hong Kong was HK$5.314 billion, up 1.4% year on year. Among them, water supply revenue to Hong Kong was HK$4.393 billion, up 2.1% year on year, and water supply revenue to Shenzhen and Dongguan was HK$921 million. The profit before tax of the East-Shenzhen project was HK$3,641 million, an increase of 1.3% over the previous year.

As of the third quarter of 2026, the water supply capacity of other water resources projects was 10.768,800 tons/day, up 21.2% year on year; sewage treatment capacity was 2.297,900 tons/day, the same as the previous year. Revenue from other water projects was HK$6.538 billion, up 16.5% year on year, and profit before tax was HK$1,759 million, up 9.9% year on year. The pre-tax profit of the water resources sector accounts for about 81% of the profit before tax from continuing operations.

Steady growth in the property and hotel business

In the first three quarters of 2026, Guangdong Tianhe City property investment income was HK$1,335 million, up 5.8% year on year, and profit before tax was HK$797 million, up 3.9% year on year, mainly driven by an increase in average rent and occupancy rates for some properties.

Hotel business revenue was HK$538 million, up 6.5% year on year, and profit before tax was HK$87 million, up 26.7% year on year. The department store's pre-tax profit of HK$43 million was mainly affected by closing costs; Guangdong Energy's profit before tax was HK$123 million, mainly affected by rising coal prices; and the pre-tax profit of the Xingliu Expressway was HK$231 million, which remained stable overall.

Risk Alerts

Dongshen project renewal risk; water price adjustment risk; accounts receivable risk.