9M2019 revenue was up by 14.0% YoY while earnings dropped 2.0%YoY. Revenue of GDI in 9M2019 was in line while net earnings missedexpectations. Revenue growth in the first 9 months of 2019 was mainly due tobetter performance in water resources business and property investment anddevelopment business during the period – the two business segmentscontributed roughly 80% of total revenue in 9M2019. Although quarterly netprofit was down by high single-digit percentage in 3Q2019, we are stillconfident that the Company is set to achieve our full-year earnings estimateof approximately HK$5.4 billion in 2019, implying YoY earnings growth of noless than 7% in 2019. We thus maintain our earnings forecast.
Rapid expansions in mainland China is set to drive future growth. At theend of 9M2019, GDI had 8.584 mtpd of total designed water supply capacityand 1.291 mtpd of total designed waste water processing capacity under itsother water resources segment, which went up 43% and 13%, respectively,from the beginning of 2019 thanks to aggressive acquisitions and upgradeson existing facilities. We expect the Company to continue to increase its watersupply and processing capacity in mainland China through more acquisitionsand upgrades on existing facilities down the road.
We reiterate the "Accumulate" investment rating and raise the TP toHK$18.20. We reiterate our "Accumulate" investment rating considering thestrong growth prospect of GDI’s water business and property investment &development business. As market volatility is on the rise forcing investors toseek safe havens, we raise our TP to HK$18.20, which translates to 22.1x/20.0x/ 19.3x FY19-FY21 PER or 2.8x/ 2.7x/ 2.5x FY19-FY21 PBR.