Investment Rating - The report maintains a "Buy" rating for the company [8] Core Viewpoints - The company plans to spin off its real estate business (Yuehai Properties) through a special dividend distribution, allowing it to focus on its core water business [7] - After the spin-off, the company's operating performance and overall value are expected to significantly improve, as it will no longer be affected by the volatility of the real estate business [7] - The company's water business is stable, with high-quality assets in the Dongjiang water project, and its valuation is expected to rise after the spin-off [8] Financial Performance - In 2023, the company's net profit attributable to shareholders dropped by 34% YoY to HKD 3.12 billion, mainly due to a HKD 1.81 billion impairment loss from Yuehai Properties [7] - Excluding the impact of the real estate business, the company's core profit in 2023 was HKD 4.93 billion [7] - The company's operating cash flow in 2023 was HKD 10.71 billion, with HKD 7.1 billion coming from the core business after excluding Yuehai Properties [9] - In H1 2024, the company's operating cash flow was HKD 4.88 billion, with HKD 3.59 billion from the core business after excluding Yuehai Properties [9] Valuation and Forecast - The report maintains the company's profit forecasts for 2024-2026 at HKD 4.003 billion, HKD 4.101 billion, and HKD 4.120 billion, respectively [8] - The current market capitalization corresponds to a PE ratio of 8.5x, 8.3x, and 8.3x for 2024-2026 [8] Debt and Dividend - As of H1 2024, the company's total assets were HKD 139.8 billion, with a debt-to-asset ratio of 58% [11] - After spinning off Yuehai Properties, which has a higher debt-to-asset ratio of 87%, the company's overall debt level is expected to decrease significantly [11] - The company's dividend payout ratio in 2024H1 was 65%, consistent with 2023 [12] Business Focus - The company will no longer hold any shares in Yuehai Properties after the spin-off, allowing it to fully focus on its water business [7] - The spin-off is expected to enhance the company's operational efficiency and valuation by eliminating the drag from the real estate sector [7][8]
粤海投资：拟特别派息剥离地产，聚焦水务彰显股息价值