As global markets navigate a period of mixed performances and economic recalibrations, the Hong Kong market has shown resilience with the Hang Seng Index gaining 2.14% recently. In this environment, dividend stocks have become increasingly attractive for investors seeking steady income streams amidst fluctuating market conditions. A good dividend stock typically offers consistent payouts, strong financial health, and a sustainable business model—qualities that are particularly valuable in today's uncertain economic landscape.
Overview: China Resources Gas Group Limited, with a market cap of HK$65.60 billion, engages in the sale of natural and liquefied gas and the connection of gas pipelines.
Operations: China Resources Gas Group Limited generates revenue from several segments, including HK$3.23 billion from gas stations, HK$9.65 billion from gas connections, HK$4.34 billion from comprehensive services, HK$444.11 million from design and construction services, and HK$87.31 billion from the sale and distribution of gas fuel and related products (excluding gas stations).
Dividend Yield: 4.1%
China Resources Gas Group Limited announced an interim dividend of HKD 0.25 per share for the first half of 2024, with a payout ratio of 55.5%, indicating dividends are covered by earnings and cash flows. Despite reporting higher sales at HKD 52.08 billion, net income slightly decreased to HKD 3.46 billion from last year’s HKD 3.55 billion. Recent executive changes may impact future stability, but the current dividend yield remains lower compared to top-tier Hong Kong dividend payers.
Overview: Zengame Technology Holding Limited, with a market cap of HK$2.75 billion, is an investment holding company that develops and operates mobile games primarily in the People’s Republic of China.
Operations: Zengame Technology Holding Limited generates CN¥1.98 billion from developing and operating mobile games in the People’s Republic of China.
Dividend Yield: 8.4%
Zengame Technology Holding Limited reported a decline in sales and net income for the first half of 2024, with sales at CNY 934.32 million and net income at CNY 309.84 million. Despite this, the company's dividend payout ratio remains low at around 30%, indicating dividends are well covered by both earnings and cash flows. However, its dividend track record is unstable, having only paid dividends for five years with some volatility in payments.
Overview: Zhongsheng Group Holdings Limited is an investment holding company that operates in the sale and service of motor vehicles in the People’s Republic of China, with a market cap of HK$21.20 billion.
Operations: Zhongsheng Group Holdings Limited generates CN¥179.81 billion from the sale of motor vehicles and the provision of related services in the People’s Republic of China.
Dividend Yield: 8.6%
Zhongsheng Group Holdings' dividend payments have been volatile over the past decade, although they are well covered by earnings (payout ratio: 49%) and cash flows (cash payout ratio: 52.1%). The recent half-year financial results showed a decline in net income to CNY 1.58 billion from CNY 3 billion a year ago. Despite this, the company continues to trade at good value compared to peers and has undertaken significant debt financing initiatives to manage costs and extend loan maturities.
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:1193 SEHK:2660 and SEHK:881.
