[ET Net News Agency, 21 December 2020] Guangdong Investment's (GDI) (00270) share price
is down by 22% year-to-date, Daiwa Research attributed the weakness to investor concerns
for its weak EPS and DPS on the COVID-19 impact, and uncertainty on Dongjiang water prices
for 2021-23.
However, the research house expects the Dongjiang water supply deal to HK to be
announced on 22 December. Given GDI's decent 5% 2021 dividend yield with 30bps yield
growth for 2022, Daiwa reiterated its "buy" rating and target price of HK$16.
It thinks the Dongjiang water price for 2021-23 will be flat based on the inflation
rate, CNY/HKD exchange rate, and real operating cost. It is unlikely to be cut. Daiwa sees
any slight price hike as a positive surprise, which would lift GDI's share price. (KL)