SEHK:270

Stock Analysis Report

Guangdong Investment

Executive Summary

Guangdong Investment Limited engages in water resources, infrastructure, property investment and development, department store, road and bridge operation, and hotel businesses.


Snowflake Analysis

Excellent balance sheet established dividend payer.

Share Price & News

How has Guangdong Investment's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 270 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

4.5%

270

4.7%

HK Water Utilities

1.6%

HK Market


1 Year Return

7.6%

270

0.03%

HK Water Utilities

6.0%

HK Market

Return vs Industry: 270 exceeded the Hong Kong Water Utilities industry which returned -0.5% over the past year.

Return vs Market: 270 exceeded the Hong Kong Market which returned 6.4% over the past year.


Shareholder returns

270IndustryMarket
7 Day4.5%4.7%1.6%
30 Day2.2%3.0%4.4%
90 Day1.1%0.7%8.6%
1 Year11.4%7.6%4.0%0.03%9.9%6.0%
3 Year87.9%67.8%30.9%17.6%27.7%14.7%
5 Year85.0%55.7%34.3%16.1%21.7%1.4%

Price Volatility Vs. Market

How volatile is Guangdong Investment's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Guangdong Investment undervalued compared to its fair value and its price relative to the market?

26.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 270 (HK$16.54) is trading below our estimate of fair value (HK$22.7)

Significantly Below Fair Value: 270 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 270 is poor value based on its PE Ratio (21.9x) compared to the Water Utilities industry average (5.7x).

PE vs Market: 270 is poor value based on its PE Ratio (21.9x) compared to the Hong Kong market (10.5x).


Price to Earnings Growth Ratio

PEG Ratio: 270 is poor value based on its PEG Ratio (2.1x)


Price to Book Ratio

PB vs Industry: 270 is overvalued based on its PB Ratio (2.7x) compared to the HK Water Utilities industry average (0.7x).


Next Steps

Future Growth

How is Guangdong Investment forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

10.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 270's forecast earnings growth (10.4% per year) is above the savings rate (1.6%).

Earnings vs Market: 270's earnings (10.4% per year) are forecast to grow slower than the Hong Kong market (11.3% per year).

High Growth Earnings: 270's earnings are forecast to grow, but not significantly.

Revenue vs Market: 270's revenue (11.7% per year) is forecast to grow faster than the Hong Kong market (10.2% per year).

High Growth Revenue: 270's revenue (11.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 270's Return on Equity is forecast to be low in 3 years time (13.5%).


Next Steps

Past Performance

How has Guangdong Investment performed over the past 5 years?

5.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 270 has high quality earnings.

Growing Profit Margin: 270's current net profit margins (33.4%) are lower than last year (38%).


Past Earnings Growth Analysis

Earnings Trend: 270's earnings have grown by 5.3% per year over the past 5 years.

Accelerating Growth: 270's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 270 had negative earnings growth (-0.3%) over the past year, making it difficult to compare to the Water Utilities industry average (16.7%).


Return on Equity

High ROE: 270's Return on Equity (10.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Guangdong Investment's financial position?


Financial Position Analysis

Short Term Liabilities: 270's short term assets (HK$30.5B) exceed its short term liabilities (HK$12.0B).

Long Term Liabilities: 270's short term assets (HK$30.5B) exceed its long term liabilities (HK$16.2B).


Debt to Equity History and Analysis

Debt Level: 270's debt to equity ratio (17.3%) is considered satisfactory.

Reducing Debt: 270's debt to equity ratio has increased from 14.2% to 17.3% over the past 5 years.

Debt Coverage: 270's debt is well covered by operating cash flow (77.8%).

Interest Coverage: 270 earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: 270 has a high level of physical assets or inventory.

Debt Coverage by Assets: 270's debt is covered by short term assets (assets are 3.5x debt).


Next Steps

Dividend

What is Guangdong Investment's current dividend yield, its reliability and sustainability?

3.19%

Current Dividend Yield


Dividend Yield vs Market

company3.2%marketbottom25%2.2%markettop25%6.0%industryaverage3.7%forecastin3Years4.0%

Current dividend yield vs market & industry

Notable Dividend: 270's dividend (3.23%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.17%).

High Dividend: 270's dividend (3.23%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.02%).


Stability and Growth of Payments

Stable Dividend: 270's dividends per share have been stable in the past 10 years.

Growing Dividend: 270's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (72.7%), 270's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 270's dividends in 3 years are forecast to be covered by earnings (76.5% payout ratio).


Next Steps

Management

What is the CEO of Guangdong Investment's salary, the management and board of directors tenure and is there insider trading?

9.5yrs

Average management tenure


CEO

Yinheng Wen (42yo)

7.2yrs

Tenure

HK$3,481,000

Compensation

Mr. Yinheng Wen has been a Managing Director of Guangdong Investment Ltd. since November 15, 2012. From 2003 to 2006, Mr. Wen served in Guangdong Bureau and Listed Company Supervision Department of China S ...


CEO Compensation Analysis

Compensation vs Market: Yinheng's total compensation ($USD447.70K) is below average for companies of similar size in the Hong Kong market ($USD1.00M).

Compensation vs Earnings: Yinheng's compensation has been consistent with company performance over the past year.


Management Age and Tenure

9.5yrs

Average Tenure

52.5yo

Average Age

Experienced Management: 270's management team is seasoned and experienced (9.5 years average tenure).


Board Age and Tenure

15.7yrs

Average Tenure

64yo

Average Age

Experienced Board: 270's board of directors are seasoned and experienced ( 15.7 years average tenure).


Insider Trading

Insider Buying: 270 insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyHK$4,283,74901 Nov 19
Kwok-Po Li
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares250,000
Max PriceHK$17.13
BuyHK$29,763,99901 Nov 19
Kwok-Po Li
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares1,750,000
Max PriceHK$17.01
SellHK$3,296,00005 Sep 19
Lai Ho Lam
EntityIndividual
Role
Member of the Board of Directors
Company Secretary & Executive Director
Shares200,000
Max PriceHK$16.48
BuyHK$2,902,24105 Sep 19
Kwok-Po Li
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares176,000
Max PriceHK$16.49
BuyHK$3,370,16105 Sep 19
Kwok-Po Li
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares204,000
Max PriceHK$16.52
BuyHK$5,279,25404 Sep 19
Kwok-Po Li
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares322,000
Max PriceHK$16.40
SellHK$1,650,00004 Sep 19
Lai Ho Lam
EntityIndividual
Role
Member of the Board of Directors
Company Secretary & Executive Director
Shares100,000
Max PriceHK$16.50
BuyHK$4,891,07504 Sep 19
Kwok-Po Li
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares298,000
Max PriceHK$16.41
SellHK$3,292,00103 Sep 19
Lai Ho Lam
EntityIndividual
Role
Member of the Board of Directors
Company Secretary & Executive Director
Shares200,000
Max PriceHK$16.46
BuyHK$10,168,99025 Jun 19
Kwok-Po Li
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares650,000
Max PriceHK$15.64
BuyHK$5,500,60125 Jun 19
Kwok-Po Li
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares350,000
Max PriceHK$15.72
BuyHK$5,965,76513 Jun 19
Kwok-Po Li
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares372,000
Max PriceHK$16.04
BuyHK$10,101,12713 Jun 19
Kwok-Po Li
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares628,000
Max PriceHK$16.08

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Theresa Ho Lam (63yo)

    Company Secretary & Executive Director

    • Tenure: 4.3yrs
    • Compensation: HK$2.92m
  • Johnson Tsang (49yo)

    CFO & Executive Director

    • Tenure: 11.8yrs
    • Compensation: HK$2.37m
  • Yinheng Wen (42yo)

    MD & Executive Director

    • Tenure: 7.2yrs
    • Compensation: HK$3.48m
  • Wailin Hou (56yo)

    Chairman of the Board

    • Tenure: 0.6yrs

Board Members

  • John Chan (75yo)

    Independent Non-Executive Director

    • Tenure: 21.6yrs
    • Compensation: HK$749.00k
  • Moses Cheng (69yo)

    Independent Non-Executive Director

    • Tenure: 20.2yrs
    • Compensation: HK$700.00k
  • Wai Keung Li (62yo)

    Non-Executive Director

    • Tenure: 19.7yrs
  • Theresa Ho Lam (63yo)

    Company Secretary & Executive Director

    • Tenure: 4.3yrs
    • Compensation: HK$2.92m
  • Daniel Fung (65yo)

    Independent Non-Executive Director

    • Tenure: 20yrs
    • Compensation: HK$700.00k
  • David Li (80yo)

    Independent Non-Executive Director

    • Tenure: 21.6yrs
    • Compensation: HK$770.00k
  • Johnson Tsang (49yo)

    CFO & Executive Director

    • Tenure: 11.8yrs
    • Compensation: HK$2.37m
  • Anthony Wu (65yo)

    Independent Non-Executive Director

    • Tenure: 7.4yrs
    • Compensation: HK$700.00k
  • Yinheng Wen (42yo)

    MD & Executive Director

    • Tenure: 7.2yrs
    • Compensation: HK$3.48m
  • Wailin Hou (56yo)

    Chairman of the Board

    • Tenure: 0.6yrs

Company Information

Guangdong Investment Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Guangdong Investment Limited
  • Ticker: 270
  • Exchange: SEHK
  • Founded: 1973
  • Industry: Water Utilities
  • Sector: Utilities
  • Market Cap: HK$109.705b
  • Shares outstanding: 6.54b
  • Website: https://www.gdi.com.hk

Number of Employees


Location

  • Guangdong Investment Limited
  • Guangdong Investment Tower
  • 28th and 29th Floors
  • Central
  • Hong Kong

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
GGDV.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
GUGDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
270SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDJan 1992
270SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDJan 1992
270SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDJan 1992
GGDV.YOTCPK (Pink Sheets LLC)UNSPONSORED ADRUSUSDNov 2008

Biography

Guangdong Investment Limited engages in water resources, infrastructure, property investment and development, department store, road and bridge operation, and hotel businesses. It operates through seven segments: Water Resources, Property Investment and Development, Department Store, Electric Power Generation, Hotel Operation and Management, Road and Bridge, and Others. The Water Resources segment provides water distribution and sewage treatment services; and construction of water supply and sewage treatment infrastructure in Mainland China and Hong Kong. The Property Investment and Development segment invests in various properties, such as shopping malls, office buildings, and hotels in Hong Kong and Mainland China; and engages in the development of properties in Mainland China. This segment also provides property management services for various commercial properties. The Department Stores segment operates department stores in Mainland China. The Electric Power Generation segment operates coal-fired power plants that supply electricity and steam in the Guangdong province, Mainland China. The Hotel Operation and Management segment operates hotels and manages third parties hotels in Hong Kong and Mainland China. As of December 31, 2018, this segment managed 34 hotels, including 2 in Hong Kong, 1 in Macau, and 31 in Mainland China. It also invests in various road and bridge projects; and provides treasury services in Hong Kong and Mainland China, as well as corporate services. The company was formerly known as Union Globe Development Limited and changed its name to Guangdong Investment Limited in January 1987. The company was incorporated in 1973 and is based in Central, Hong Kong. Guangdong Investment Limited is a subsidiary of GDH Limited. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/01/19 12:43
End of Day Share Price2020/01/17 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.