Guangdong Investment: Diversification of Business Operations and Increased Holdings by Parent Company Reflect Confidence in Company's Future Prospects

PR Newswire

Tue, Apr 2, 2024, 5:17 AM 5 min read

HONG KONG, April 2, 2024 /PRNewswire/ -- Guangdong Investment Limited ("Guangdong Investment" or "the Group", HKEx Stock Code: 0270), the supplier of Dongjiang Water, recently announced their 2023 annual results. The Group recorded consolidated revenue of HK$24.2 billion, achieving an increase by 4.3% year-on-year. A final dividend of HK12.33 cents was declared, resulting in a total dividend of HK31.04 cents per share for the year. This positions the Group to preserve sufficient funds for its development and operation, as well as generate stable and sustainable returns for its shareholders, ultimately facilitating the Group's long-term healthy development.

Core Water Resources Business Continues to Expand

Guangdong Investment has a diversified portfolio of businesses, with the Dongjiang Water business providing a stable source of income for the Group. The total volume of water supply to Hong Kong, Shenzhen, and Dongguan during 2023 amounted to 2.209 billion tons, generating a revenue of HK$6,383 million. Last year, the HKSAR Government and the Guangdong Provincial Government signed The Hong Kong Water Supply Agreement for 2024 to 2026. Pursuant to the agreement, the annual basic water prices for the three years of 2024, 2025, and 2026 are HK$5,136 million, HK$5,259 million, and HK$5,385 million, respectively. This indicates that the Group's future revenue from the Dongjiang Water business will continue to steadily rise.

Apart from the Dongjiang Water business, Guangdong Investment's Other Water Resources Projects segment also achieved excellent results during the year. Profit before tax of Other Water Resources Projects for the year, excluding the net exchange differences and net finance costs, amounted to HK$1,854 million in aggregate, achieving an increase by 1.1% year-on-year. The water supply capacity of the water supply plants and the wastewater processing capacity of the sewage treatment plants operated by the subsidiaries and associates of the Group as at 31 December 2023 are 10,486,800 tons per day and 2,054,400 tons per day, respectively. In addition, the water supply capacity of the water supply plants and the wastewater processing capacity of the sewage treatment plants under construction by the subsidiaries of the Group as at 31 December 2023 were 1,437,000 tons per day and 50,000 tons per day, respectively.

Hotel Operation and Management Business Turns Loss to Profit

The hotel industry has shown clear signs of recovery due to positive factors such as the pandemic ending and the border reopening. Guangdong Investment also benefited from this. The Group's hotel management team managed a total of 20 hotels, of which three were located in Hong Kong and 17 in Mainland China. During the year, the hotel operation and management business benefitted from positive factors such as the pandemic ending and the border reopening, resulting in a substantial year-on-year increase of 67.8% to HK$649 million in its overall operating revenue, turning loss to profit. The average occupancy rate of the property investment and development business remained strong. For example, the occupancy rate of Guangzhou Teem Plaza - Teemmall Shopping Center and Tianjin Teemmall Shopping Center is over 95%. The department store retail business also maintained steady performance. The operating efficiency of the power business increased due to the rise in electricity consumption and the fall in coal prices. The traffic flow and economic efficiency of the road and bridge business recovered steadily, resulting in an increase in overall operating revenue.

The Group will adhere to the development strategy of "balancing progress and stability while enhancing quality and efficiency" in 2024, maintain stable growth of its core operations, and strengthen its risk management capabilities to create long-term value for its stakeholders. Meanwhile, the Group will also focus its resources on expanding the water business to high-value-added businesses. It will steadily promote property sales in the property investment and development business, capitalizing on post-pandemic business opportunities to increase profits in the hotel operation and management business. Furthermore, the Group will actively seek new market opportunities in the department store retail business by leveraging on its branding strengths, which will open up new sources of income and cut down costs in the power business. For the road and bridge business segment, the Group aims to boost revenues by increasing customer traffic flow and seizing development opportunities driven by the Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area. Together, these strategies will serve as the backbone of the Group's long-term growth while enhancing operational outcomes and overall value.

Guangdong Investment Receives Over HK$50 Million in Additional Investment From Parent Company Guangdong Holdings

At the end of March, Guangdong Investment received further support from its parent company, Guangdong Holdings Limited, who increased their stake by acquiring approximately 14.258 million shares at an average price of approximately HK$3.51 per share. Guangdong Holdings' stake in Guangdong Investment rose from roughly 56.49% to about 56.71%, representing an investment of over HK$50 million. Guangdong Investment stated that the shareholding increase reflects Guangdong Holdings' strong confidence in the Group's future growth, and represents full support for its long-term development plan. Guangdong Holdings intends to continue acquiring additional shares of the Guangdong Investment when appropriate.