Net profit in the first half of 2021 surged 165.4 per cent year-on-year to HK $2.131 billion, better than expected. During the period, revenue from the infrastructure business sector rose 49.5 per cent year-on-year to HK $5 billion, while revenue from the property sector rose 18.1 per cent year-on-year to HK $9.606 billion, while revenue from the consumer goods sector fell 1.5 per cent to HK $1.71 billion. At the same time, profits in infrastructure, real estate and consumer goods rose 197.5 per cent, 199.5 per cent and 18.9 per cent to HK $1.215 billion, HK $768 million and HK $292 million, respectively. During the period, the composite gross margin rebounded 2.6 percentage points year-on-year to 39.4%, while the net profit margin rose 7.0 percentage points to 13.1%.

We have slightly adjusted our profit forecasts for 2021-2023 under the new assumptions. As the regulatory environment for property developers is expected to become stricter in the future and lead to a decline in revenue in the property sector, the company's total revenue is expected to record 13.6 per cent /-5.8 per cent /-1.8 per cent year-on-year growth between 2021 and 2023, respectively. Profit margins are expected to pick up gradually, and the company's consolidated gross margin is expected to return to 38.3% / 38.8% / 39.6% respectively between 2021 and 2023. Our adjusted earnings per share forecasts for 2021 to 2023 are HK $3.255 / HK $3.325 / HK $3.415 respectively. The company's expected dividend per share during the forecast period will be HK $1.302 / HK $1.330 / HK $1.366 respectively.

In view of the attractive dividend yield, reiterate the "buy" rating and the target price of HK $16.50. In view of the continued recovery and the company's attractive dividend yield, which is expected to exceed 10 per cent per year from 2021 to 2023, we reaffirm our "buy" investment rating. Our target price is equivalent to a price-to-earnings ratio of 2021 / 5.0x / 4.8x for 2023 or a price-to-book ratio of 2021 to 2023, respectively.