As global markets react to the U.S. Federal Reserve's recent rate cut, Hong Kong's Hang Seng Index has shown a notable gain of 5.12%, reflecting positive investor sentiment despite mixed economic data from China. With this backdrop, dividend stocks in Hong Kong present an attractive option for investors seeking stable returns amid market volatility. In the current environment, a good dividend stock typically offers consistent payouts and demonstrates resilience against economic fluctuations—qualities that are particularly valuable as markets adjust to new monetary policies and economic conditions.
Overview: Financial Street Property Co., Limited, with a market cap of HK$829.17 million, provides property management and related services in the People’s Republic of China through its subsidiaries.
Operations: Financial Street Property Co., Limited generates CN¥1.62 billion in revenue from property management and related services in the People’s Republic of China through its subsidiaries.
Dividend Yield: 8.6%
Financial Street Property is currently trading at 66.4% below its estimated fair value, making it potentially attractive for value investors. The company’s dividend yield of 8.61% places it in the top 25% of dividend payers in Hong Kong, with dividends covered by earnings (52%) and cash flows (54.6%). However, its dividend history is short and volatile, having paid dividends for only three years with significant fluctuations. Recent earnings showed a decline in net income from CNY 71.11 million to CNY 63.47 million year-over-year as of June 30, 2024.
Overview: Tian An China Investments Company Limited is an investment holding company that focuses on investing in, developing, and managing properties in the People's Republic of China, Hong Kong, the United Kingdom, and Australia, with a market cap of HK$5.75 billion.
Operations: Tian An China Investments Company Limited generates revenue from property investment (HK$581.17 million) and property development (HK$1.10 billion).
Dividend Yield: 5.1%
Tian An China Investments offers a dividend yield of 5.1%, which is lower than the top 25% of dividend payers in Hong Kong. The company's dividends are well covered by earnings (payout ratio: 30.3%) and cash flows (cash payout ratio: 16.9%), with stable payments over the past decade. However, recent earnings showed a significant decline, with net income dropping from HK$577.22 million to HK$78.06 million year-over-year as of June 30, 2024, due to lower property sales and decreased fair value in investment properties.
Overview: China Starch Holdings Limited, with a market cap of HK$1.01 billion, manufactures and sells cornstarch, lysine, starch-based sweeteners, modified starch, and other corn-refined products in the People’s Republic of China.
Operations: China Starch Holdings Limited generates revenue primarily from its Upstream Products (CN¥9.80 billion) and Fermented and Downstream Products (CN¥3.86 billion).
Dividend Yield: 4.1%
China Starch Holdings has a low payout ratio of 10.4%, ensuring dividends are well covered by earnings and cash flows (cash payout ratio: 25.9%). However, its dividend payments have been volatile over the past decade. Recent earnings showed a significant turnaround, with net income at CNY 214.66 million for the first half of 2024 compared to a net loss previously. Board changes include Ms. Sze Tak On's appointment as an independent non-executive Director and chairman of various committees effective August 2024.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include SEHK:1502 SEHK:28 and SEHK:3838.
