2019 revenue surged 24.9% YoY but net earnings increased only 0.6%YoY. The revenue of the Company in 2019 beat expectation but its net profitto shareholders was basically in line with market expectation. During thereporting period, revenue from water resources and property investment &development segments went up YoY by 15.0% and 138.3%, respectively, toHKD 9.47 bn and HKD 3.94 bn. The sales from water resources and propertyinvestment & development segments made up 80.4% of total revenues andcontributed positively to overall revenue growth of GDI in 2019.
Water and property segments are set to be the growth drivers. GDI had9.003 mtpd of total designed water supply capacity and 1.331 mtpd of totaldesigned waste water processing capacity under its other water resourcessub-segment at the end of 2019, which went up YoY by 50.0% and 16.8%,respectively, from 2018. The sharp rise in water capacity was a result ofaggressive acquisitions in 2019, which is expected to continue in 2020.
　　Meanwhile, from the delivery of an aggregate of 50,618 sq.m of residentialproperties in 2019, GDI recognized revenue of HK$2,540 mn from propertysales during the year, which was up dramatically by 713% YoY. With sellableGFA of residential properties exceeding 200,000 sq.m at the end of 2019,property sales are expected to further rise in 2020.
We reiterate the "Accumulate" investment rating and the TP ofHK$18.20. We reiterate our "Accumulate" investment rating considering thestrong growth prospect of GDI’s water business and property business from2020 to 2022. Meanwhile, GDI’s dividend yields are estimated to be 4.2%/4.3%/ 4.4% from 2020 to 2022, respectively. Our current TP of HK$18.20corresponds to 20.0x/ 19.2x/ 18.8x FY20-FY22 PER.