Huayuan Securities Maintains "Buy" Rating on SHENZHEN INT'L (00152); Transformation Projects Deliver, High Dividend Value Shines

Huayuan Securities released a research report maintaining a "Buy" rating on SHENZHEN INT'L (00152), stating that the company's South China logistics park transformation and upgrade project has entered a value-realization phase. Land preparation is providing incremental profits, and the company's value is becoming more prominent amid an enhanced dividend policy. The main points from Huayuan Securities are as follows.

On the event front, SHENZHEN INT'L announced progress on the first phase of the South China logistics park transformation. On December 26, 2025, the second-phase reserved land (Stage One), specifically plot 02-20-02, received approval from the Longhua District government, and related land supply work will commence.

The continued delivery of the second-phase reserved land for the South China logistics park transformation is expected to release incremental earnings during 2026-2027. In 2023, the company signed a land preparation agreement for the South China logistics park, receiving RMB 1.058 billion in demolition compensation and the right to use 108,700 square meters of reserved land, which includes 508,300 square meters of residential floor area and 87,600 square meters of office and commercial space.

Referencing the post-tax gains from the land swap for plot 02-20-04 in 2024, the firm estimates that the recognition of post-tax gains for plot 02-20-02 (approximately 140,000 square meters of residential area) will be around HKD 2.6 billion. A further estimated 337,500 square meters of land is expected to be recognized in two subsequent phases; under the same calculation method, approximately HKD 5.6 billion in post-tax land swap gains remains to be realized.

SHENZHEN INT'L maintains a relatively stable dividend distribution policy. From 2013 to 2016, the company's dividend payout ratio was around 40%, which increased to approximately 50% from 2017 to 2024. Total dividend distributions from 2018 to 2024 reached HKD 11.8 billion.

Based on a 50% dividend payout ratio, the estimated dividend yields for 2025-2027 are approximately 8.7%, 8.7%, and 6.7% respectively. With such high dividend yields, the company is expected to return to a reasonable valuation range.

Risk warnings include potential delays in the progress of logistics park projects or asset securitization, slower-than-expected transformation and upgrading, and a yet-to-recover volume of highway traffic.