GUANGDONG INVESTMENT (270) H2 2023 earnings summary

Executive summary

• FY2023 revenue rose 4.3% YoY to HK$24.2bn; profit for the year fell 49.1% to HK$2.814bn, while profit attributable to owners declined 34.5% to HK$3.122bn.

• Water Resources accounted for 88% of segment results; Infrastructures and Hotel Operations represented 10% and 2%, respectively.

Financial highlights

• Gross profit was HK$10.075bn, up 2.6% YoY; gross margin fell to 41.63% from 42.35%.

• Profit before tax declined 36.4% to HK$4.604bn; income tax expense rose 4.1% to HK$1.790bn.

• Net margin fell to 11.63% from 23.82%; basic and diluted EPS decreased 34.5% to HK47.75 cents.

Outlook and guidance

• Hong Kong water supply revenue range is HK$5.06–5.14bn for 2024, HK$5.18–5.26bn for 2025, and HK$5.32–5.39bn for 2026; annual supply ceiling remains 820m tons.

• Volume-dependent tariff deduction unit rate is HK$0.315/ton in 2024, HK$0.323 in 2025, and HK$0.331 in 2026.

• New and expanded water projects in Nanchang, Wuxi, Baoying and Zhaoqing have expected investment of RMB917m, equivalent to HK$1.012bn; designed added capacity is 257,000 tpd for water supply and 3,000 tpd for sewage treatment.