Core Viewpoint - The report initiates coverage on Yuehai Investment with a "Buy" rating and a target price of HKD 9.10, corresponding to a 2025 target PE of 14.0 times [1] Group 1: Company Overview - Yuehai Investment is a quality water service platform controlled by Guangdong state-owned assets, with its core asset being the Dongshen Water Supply Project [1] - The company's business includes five main segments: water services, property investment and development, department store operations, hotel ownership and management, and energy road and bridge [1] - After divesting Yuehai Land, the company's fundamentals have stabilized, and it has strong free cash flow, which is expected to continue providing high dividend returns [1] Group 2: Dongshen Water Supply Project - The Dongshen Water Supply Project has supplied a cumulative total of 30 billion cubic meters of water to Hong Kong since 1965, accounting for nearly 80% of Hong Kong's freshwater consumption [2] - The projected water supply to Hong Kong in 2024 is 8 million tons, with a water price of HKD 6.42 per ton [2] - The project has undergone two pricing phases, with a "bundled reduction" mechanism implemented since 2020, and the basic water price is expected to grow at a rate of 2.39% year-on-year from 2024 to 2026 [2] - The DCF valuation of the Dongshen Water Supply Project is estimated to be between HKD 45 billion and HKD 62 billion, assuming contract renewal until 2120 [2] Group 3: Financial Performance and Dividend Outlook - Free cash flow is expected to reach HKD 9.229 billion in 2024, with a cash dividend payout ratio of 65% following the divestment of Yuehai Land [3] - The dividend payout ratio, considering physical dividends, is projected to be 78.87%, significantly higher than the industry average of 57.76%, with a dividend yield of 5.65% [3] - For 2025-2027, the company is expected to maintain a dividend payout ratio of 65%, with projected dividend yields of 6.02%, 6.28%, and 6.54% respectively, making it attractive compared to peers [3] Group 4: Market Perspective and Valuation - The market expresses concerns regarding the uncertainties surrounding the renewal of the Dongshen Water Supply Project's franchise rights, water pricing, and transaction pricing [3] - The company believes that the visibility of the renewal is strong due to its historical significance and multiple asset restructuring plans [3] - The DCF valuation of the Dongshen project, along with contributions from other water resources and businesses, indicates that Yuehai Investment remains a valuable investment even under pessimistic assumptions [3] - The forecasted net profits for 2025-2027 are HKD 4.218 billion, HKD 4.397 billion, and HKD 4.576 billion, with year-on-year growth rates of 34.2%, 4.2%, and 4.1% respectively [4] - The company is assigned a target PE of 14.0 times for 2025, leading to a target price of HKD 9.10, reflecting its stable growth and high dividend yield compared to industry averages [4]

Investment Rating - The report initiates coverage on Yuehai Investment with a "Buy" rating and sets a target price of HKD 9.10, corresponding to a 2025 target PE of 14.0 times [1][7]. Core Views - Yuehai Investment is a high-quality water utility platform controlled by Guangdong state-owned assets, with its core asset being the Dongshen Water Supply Project, which has undergone significant structural changes since 1997 [1]. - The company has a strong free cash flow and is expected to maintain high dividend returns following the divestment of Yuehai Land [1][19]. Summary by Sections Investment Highlights - The Dongshen Water Supply Project is a premium asset, accounting for nearly 80% of Hong Kong's freshwater supply, with a projected revenue of HKD 63.60 billion in 2024, representing 34% of total revenue [20]. - The company has turned positive in free cash flow since 2023, with projections of HKD 92.29 billion in 2024, and maintains a high dividend payout ratio of 65% [21]. - The divestment of Yuehai Land allows the company to focus on its core water business, enhancing stability and potentially increasing valuation [22]. Valuation and Financial Projections - The DCF valuation of the Dongshen Water Supply Project is estimated between HKD 450 billion and HKD 620 billion, with a stable profit contribution from other water resources and businesses [2][23]. - The forecasted net profit for 2025-2027 is HKD 42.18 billion, HKD 43.97 billion, and HKD 45.76 billion, with corresponding EPS of HKD 0.65, HKD 0.67, and HKD 0.70 [5][11]. Market Perspective - The report contrasts with market concerns regarding the uncertainty of the Dongshen project's operating rights renewal, water pricing, and transaction pricing, asserting that the renewal visibility is strong due to the project's historical significance [4][23]. - The report emphasizes that the water pricing will remain reasonable despite rising costs, as the Hong Kong Water Supplies Department aims to adjust water pricing cautiously [4][23].

格隆汇8月13日丨粤海投资(00270.HK)宣布，本公司将于2025年8月25日（星期一）举行董事会会议，藉 以考虑及批准（当中包括）本公司及其附属公司截至2025年6月30日止六个月的未经审核中期业绩，以 及考虑派付中期股息等事宜。 ...

粤海投資有限公司 阳娜 （於香港註冊成立之有限公司） （股份代號：00270） 董事會會議日期 粤海投資有限公司（「本公司」）董事會（「董事會」）謹此宣佈本 公司將於 2025 年 8 月 25 日（星期一）舉行董事會會議，藉以考慮及 批准（當中包括）本公司及其附屬公司截至 2025 年 6 月 30 日止六個 月的未經審核中期業績，以及考慮派付中期股息等事宜。 承董事會命 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負 責，對其準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全 部或任何部分內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 總法律顧問兼首席合規官 和公司秘書 香港，2025 年 8 月 13 日 於本公告日期，本公司董事會由四名執行董事白濤女士、曠虎先生、曾翰南先生 和梁元娟女士；兩名非執行董事王閔先生和王蘇榮女士；以及四名獨立非執行 董事陳祖澤博士、馮華健先生、鄭慕智博士和李民斌先生組成。 ...

Core Viewpoint - The company, a state-owned enterprise in Guangdong, has a strong portfolio in water supply to Hong Kong, with a national layout and significant contributions from its water resources segment, which accounts for 81% of its pre-tax profits [1] Water Resources - The East Shenzhen water supply project has a yearly supply capacity of 2.423 billion cubic meters, providing 70%-80% of Hong Kong's freshwater and over 50% of Shenzhen's water needs [1] - The project is expected to supply 39% of its total water to Hong Kong in 2024, contributing 81% to the project's total revenue [1][2] - The project has reached its supply limit of 820 million cubic meters to Hong Kong over the past four years, with stable demand driven by the region's population [2] Other Business Segments - The company has streamlined its operations, with the water resources segment projected to contribute 81% to overall performance in 2024, followed by property investment at 10% [3] - The property investment segment, particularly Tianhe City, has shown stable profits and improved rental rates [3] - The energy segment's profits are linked to coal prices, while hotel operations have returned to normal levels [3] Financial Analysis & Profit Forecast - The company is expected to maintain a dividend yield of 6.51% to 6.93% over the next three years, with a sustainable net profit of 4.1 billion HKD in 2024 [3][4] - The asset-liability ratio is projected to decrease to 30.9% by the end of 2024, indicating effective control over interest-bearing liabilities [3] - Future net profits are forecasted at 4.54 billion HKD in 2025, with a price-to-earnings ratio of 9.98x [4]

Group 1 - The top three stocks with net inflow of southbound funds are Yingfu Fund (02800) with 6.292 billion, Hang Seng China Enterprises (02828) with 1.618 billion, and Southern Hang Seng Technology (03033) with 0.956 billion [1] - The top three stocks with net outflow of southbound funds are China Mobile (00941) with -0.289 billion, Jitu Express-W (01519) with -0.185 billion, and Horizon Robotics-W (09660) with -0.152 billion [1] - In terms of net inflow ratio, Anjii Food (02648), Pacific Shipping (02343), and Yuehai Investment (00270) lead the market with 55.07%, 54.09%, and 53.58% respectively [1] Group 2 - The top ten stocks with the highest net inflow include Yingfu Fund (02800) at 6.292 billion, Hang Seng China Enterprises (02828) at 1.618 billion, and Southern Hang Seng Technology (03033) at 0.956 billion [2] - The top ten stocks with the highest net outflow include China Mobile (00941) at -0.289 billion, Jitu Express-W (01519) at -0.185 billion, and Horizon Robotics-W (09660) at -0.152 billion [2] - The top three stocks with the highest net inflow ratio are Anjii Food (02648) at 55.07%, Pacific Shipping (02343) at 54.09%, and Yuehai Investment (00270) at 53.58% [3]

Investment Rating - The report assigns a "Buy" rating to the company [10]. Core Insights - Yuehai Investment is a Guangdong state-owned enterprise with a strong portfolio in water supply to Hong Kong, holding a 30-year concession for the Dongshen Water Supply Project, which accounts for 70%-80% of local freshwater usage. The company is expected to enter a stable dividend phase by 2025, with an estimated dividend yield of 6.77% [3][6]. Summary by Sections Company Overview - Yuehai Investment is primarily focused on water resources, with the Guangdong provincial government holding a 58.27% stake. The company operates five main business segments, with the water resources segment contributing 81% to the overall pre-tax profit. The Dongshen Water Supply Project is the core asset, providing stable cash flow [6][16]. Water Resources - The Dongshen Water Supply Project has a supply capacity of 2.423 billion cubic meters annually, supplying 70%-80% of Hong Kong's freshwater and over 50% of Shenzhen's water. The project is expected to generate 39% of its total supply to Hong Kong in 2024, contributing 81% to the project's total revenue [7][36]. Other Water Projects - Other water resource projects have entered a stable operational phase, with a design capacity of 5.895 billion tons/year for water supply and 1.221 billion tons/year for sewage treatment. Revenue from construction has declined significantly, indicating a shift to stable operations [8][30]. Other Business Segments - The performance of other business segments has stabilized after the removal of factors causing volatility. The contributions to pre-tax profit from various segments are 81% from water resources, 10% from property investment, and smaller percentages from other sectors [9][23]. Financial Analysis & Profit Forecast - The company is projected to achieve a sustainable net profit of HKD 4.1 billion in 2024, with a debt ratio of 30.9% by the end of 2024. The dividend payout ratio is expected to remain at 65% for 2023-2024, with forecasted net profits of HKD 4.54 billion, HKD 4.75 billion, and HKD 4.83 billion for 2025-2027, respectively [10][28].

FF301 第 1 頁 共 10 頁 v 1.1.1 FF301 股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 | 截至月份: | 2025年7月31日 | 狀態: 新提交 | | --- | --- | --- | | 致：香港交易及結算所有限公司 | | | | 公司名稱: | 粤海投資有限公司 | | | 呈交日期: | 2025年8月4日 | | | I. 法定/註冊股本變動 | 不適用 | | II. 已發行股份及/或庫存股份變動 | 1. 股份分類 | 普通股 | | 股份類別 | 不適用 | | 於香港聯交所上市 (註1) | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 00270 | 說明 | | 不適用 | | | | | | | | 已發行股份（不包括庫存股份）數目 | | | 庫存股份數目 | | 已發行股份總數 | | | 上月底結存 | | | | 6,537,821,440 | | 0 | | 6,537,821,440 | | 增加 / ...

Investment Rating - The report maintains a "Buy" rating for several companies in the power and gas sectors, including China Power, Huaneng International, and Kunlun Energy, among others [49][51]. Core Insights - The adjustment of capacity prices for coal and gas power plants in Guangdong is expected to improve profitability for gas power plants significantly, with capacity prices increasing by 65% to 296% depending on the type of gas plant [4][10]. - The rapid development of renewable energy installations in Guangdong has increased the reliance on coal power for flexible peak regulation, with renewable energy capacity reaching 59.13 million kW by the end of 2024, accounting for 26.6% of the total installed capacity [9][10]. - The report highlights the geopolitical factors affecting natural gas prices, with European gas prices experiencing a slight increase due to renewed geopolitical tensions, while U.S. gas prices remain stable [13][20]. Summary by Sections 1. Power Sector - Guangdong has raised the capacity price for coal power plants to 165 RMB per kW per year starting January 1, 2026, and for gas power plants, prices will range from 165 to 396 RMB per kW per year starting August 1, 2025 [8][10]. - The increase in capacity prices is expected to provide annual revenue boosts of 1.72 billion RMB for Guangdong Power A and 350 million RMB for Guangzhou Development [11]. 2. Gas Sector - As of August 1, 2025, the Henry Hub spot price is $3.00/mmBtu, while the TTF spot price in Europe is €32.95/MWh, reflecting a week-on-week increase of 2.74% [13][14]. - The report notes that the domestic LNG price is 4388 RMB per ton, showing a week-on-week decrease of 1.06% [32]. 3. Market Review - The gas sector outperformed the Shanghai and Shenzhen 300 index, while the public utility, power, and environmental sectors lagged behind [39]. 4. Company and Industry Dynamics - The National Energy Administration has released guidelines to enhance the management of natural gas pipeline transportation prices, promoting transparency and optimizing resource allocation [37]. - The report discusses the performance of key companies, including Huaneng International and Inner Mongolia Huadian, with varying revenue and profit trends [44].

Investment Rating - The report maintains an "Accumulate" rating for the environmental protection industry [1] Core Views - The report emphasizes the importance of the recent price law revision, which is expected to enhance ROE and cash flow, particularly in the water pricing sector. The marketization of water prices is seen as a potential turning point for cash flow, similar to the previous developments in waste incineration [1][11] - The report identifies a cash flow turning point in water operations, suggesting that companies like Xingrong and Shou Chuang will see significant reductions in capital expenditures starting in 2025, leading to substantial increases in free cash flow [1][22] - The report highlights the strengthening of environmental inspections as a driving force for the industry, indicating a shift from policy-driven to governance-driven demand for environmental services [10] Summary by Sections Industry Trends - The environmental protection industry is transitioning towards a governance-driven model, with a focus on long-term, systematic management rather than temporary fixes [10] - The report notes a significant increase in the sales of new energy sanitation vehicles, with a year-on-year growth of 90.56% in the first half of 2025, indicating a growing market for environmentally friendly equipment [31] Water Operations - The report predicts that the water operations sector will experience a cash flow turning point, with companies like Xingrong and Shou Chuang expected to reduce capital expenditures significantly starting in 2025, leading to increased free cash flow [1][22] - The report recommends companies such as Xingrong Environment, Yuehai Investment, and Hongcheng Environment for their strong dividend potential and market positioning [23][24] Waste Incineration - The report discusses the expected decline in capital expenditures for waste incineration, which will enhance free cash flow and dividend payouts. Companies like Junxin and Green Power are highlighted for their strong dividend performance [18][20] - The report identifies new trends in waste incineration, including partnerships with data centers to enhance profitability and ROE [21] Policy Developments - The report outlines the implications of the price law revision, which aims to enhance market pricing mechanisms and improve cash flow for public utilities, particularly in water and waste management sectors [11][14] - The report emphasizes the importance of environmental inspections in driving industry growth and ensuring compliance with new regulations [9][10] Recommendations - The report recommends a focus on companies with strong operational capabilities and cash flow potential, such as Xingrong Environment, Yuehai Investment, and Hongcheng Environment, while suggesting attention to emerging players in the waste management and renewable energy sectors [23][24][25]