Morgan Stanley pointed out that Guangdong Inv (00270.HK) announced a new dividend policy in March, with the new arrangement being less aggressive than previous dividend policies, indicating a short-term dividend payout ratio of 65%, compared to 65% last year and 84% in 2022. The decrease in dividend payout ratio is mainly due to the update of reserve funds for the Dongshen water supply project. The bank predicts that the company's dividend per share from this year to 2026 will be 62 to 67 Hong Kong cents, compared to 61 Hong Kong cents last year, aligning with the company's pure profit growth.

The bank has lowered its net profit forecast for Guangdong Inv in the next two years by 18.6% and 13.1%, reflecting potential inventory impairment losses in property investment and development business, as well as lower gross margin. The target price has also been lowered by 19.4% to 6.59 yuan, based on the downward revision of profit forecasts. The bank maintains a "shareholding" rating on the stock, based on its stable water business and defensive nature, reduced risks in property investment and development business, and attractive valuation. The bank expects the dividend yield of the stock from this year to 2026 to be 7.5% to 8.7%.