Guangdong Investment Limited Recommendation: Buy Brokerage: Sassoon Securities TO SHIFT away from the highly risky residential property market in China, Guangdong Investment is gradually selling out its development rights in remote areas such as Huizhou and Qingyuan.
It also is increasing its exposure in commercial property investments in Guangzhou, as well as in infrastructure investments.
These include the proposed acquisition of the 400-megawatt Shaoguan Power Plant which should generate $184 million per annum over 20 years.
The commercial development of Tianhe City will garner rental income of approximately $300 million per annum, from 1997 onwards.
The current rental yield in commercial property in Guangzhou is about 15 per cent, compared to eight per cent in Hong Kong.
The company intends to spin off Guangdong Tours in the near future, and to expand its market share in the malting and brewery industry in China, which is forecast to achieve growth of 20 per cent in sales volume.
