The initial announcement refers to the cash payment received as a result of the recent completion of the restructuring and the sale of part of Shougang Resources (639.HK) interests, coupled with the sound business and sound financial and cash flow conditions of the company, the board of directors decided to declare a special dividend of 200 million yuan, which will be distributed in two phases. Together with the expected dividend of 700 million yuan, we expect the total dividend to reach 900 million yuan in 2022, with a dividend yield of about 9%. In addition, the company has launched a two-year share buyback programme to buy back shares of the company not exceeding HK $300 million from the open market at a price of no more than HK $2.75 per share. In order to ensure the development of the business, the company granted equity incentives to key management last year, effectively improving the consistency of the interests of management and shareholders.
In view of the current low share price, we believe that there is a better chance that the company will conduct the first round of buybacks after the quiet period (after the results are announced). We maintain our first "buy" rating.
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Pay a special dividend of 200 million yuan. The initial announcement refers to the cash payment received as a result of the recent completion of the restructuring and the sale of part of Shougang Resources (639.HK) interests, coupled with the sound business and sound financial and cash flow conditions of the company, the board of directors decided to declare a special dividend of 200 million yuan, which will be distributed in two phases. The first special dividend of HK $100 million will be paid on March 14, and the second special dividend of another HK $100 million will be paid on October 31. We believe that the special dividend paid by the company reflects financial soundness. Together with the expected dividend of 700 million yuan, the total dividend distribution in 2022 is expected to reach 900 million yuan, with a dividend yield of about 9%.
Buy back 300 million yuan of shares. In addition, it was first announced that the board of directors has approved the company's share buyback plan for a period of two years from February 15, 2022 to February 14, 2024, to buy back shares of the company not exceeding HK $300 million from the open market at a price not exceeding HK $2.75 per share. The implementation of the plan will depend on market conditions and will be at the sole discretion of the board of directors. We believe that the share buyback plan reflects the company's recognition of its own value and confidence in the industry and its business development, which will ultimately benefit the company and create value for shareholders.
Further strengthen the business. In terms of business development, we believe that the first trip in the parking business, with the company's shareholder background and management experience, will maintain rapid growth. At the end of last year, the company successfully obtained the franchise leasing service project of the parking lot of Zhangjiakou Airport, which is the 10th airport parking lot operated by the company, reflecting the market leading position in the management of parking and travel facilities of the first trip in the major transportation hubs in China. In terms of fund management, the company entered into a partnership agreement with Shougang Fund and Guoshou Investment at the end of last year to set up a partnership in the form of a limited partnership, focusing on infrastructure projects supported by national policy. According to the partnership agreement, the first trip contributed 45 million yuan as a general partner and managed the fund, while other partnerships subscribed a total of 4.5 billion yuan.
Looking forward to the first round of share buybacks. We believe that after the transformation of the first journey, the two sectors of parking and capital management business have developed well. To ensure the development of its business, the company granted a total of 1.385 billion share options to key management last year at an exercise price of HK $1.624 per share. The exercise conditions include excluding Shougang resources, the average annual growth rate of the main business income is about 48%, the average annual growth rate of the number of managed parking spaces is about 45%, and the R & D investment in science and technology shall not be less than 3% of the operating income during the exercise period. In view of the current low share price, we believe that there is a better chance that the company will conduct the first round of buybacks after the quiet period (after the results are announced). We maintain our first "buy" rating.
Risk tips: new business profitability; fund management return performance is more volatile.