Exploring Hong Kong Dividend Stocks In June 2024

As of June 2024, the Hong Kong market has shown resilience with the Hang Seng Index rising by 1.59%, signaling a positive sentiment among investors despite broader challenges in the global economy. This uptick presents an opportune moment to explore dividend-paying stocks, which can offer investors potential steady income streams and a degree of protection in volatile markets.

Top 10 Dividend Stocks In Hong Kong

Click here to see the full list of 91 stocks from our Top Dividend Stocks screener.

Below we spotlight a couple of our favorites from our exclusive screener.

China Shenhua Energy (SEHK:1088)

Simply Wall St Dividend Rating: ★★★★☆☆

Overview: China Shenhua Energy Company Limited operates in coal production and sales, power generation, and transportation services via rail, port, and shipping, as well as in the coal-to-olefins sector across China and globally, with a market capitalization of approximately HK$919.29 billion.

Operations: China Shenhua Energy Company Limited generates revenue primarily through its coal production and sales at CN¥273.67 billion, power generation contributing CN¥93.61 billion, railway services at CN¥43.62 billion, along with smaller contributions from port operations and shipping totaling CN¥6.84 billion and CN¥4.92 billion respectively, and its coal chemical business adding another CN¥6.08 billion.

Dividend Yield: 6.1%

China Shenhua Energy's dividend yield of 6.12% is below the top quartile of Hong Kong dividend payers at 7.64%. While its dividends are covered by both earnings and cash flows, with payout ratios of 79.1% and 87% respectively, the company has a history of unstable and unreliable dividend payments over the past decade. Recent leadership changes, with Mr. Lv Zhiren stepping down as CEO but becoming Chairman, may influence strategic directions but have yet to impact financial stability or dividend policies directly.

• Get an in-depth perspective on China Shenhua Energy's performance by reading our dividend report here.
• Our valuation report here indicates China Shenhua Energy may be undervalued.

China Resources Gas Group (SEHK:1193)

Simply Wall St Dividend Rating: ★★★★☆☆

Overview: China Resources Gas Group Limited operates as an investment holding company primarily involved in the distribution of natural and liquefied gas, as well as the connection of gas pipelines, with a market capitalization of approximately HK$66.07 billion.

Operations: China Resources Gas Group Limited generates revenue primarily through the sale and distribution of gas fuel and related products excluding gas stations (HK$82.63 billion), gas connection services (HK$10.89 billion), and comprehensive services (HK$4.05 billion).

Dividend Yield: 4.1%

China Resources Gas Group Limited has demonstrated a mixed track record in dividend reliability, with volatile payments over the past decade. Despite this, the company's dividends are supported by a reasonable payout ratio of 50.2% and a cash payout ratio of 53.5%. Recently, on May 24, 2024, they approved an increased final dividend of HK$1.0069 per share for the year ended December 31, 2023. However, with a current yield of 4.05%, it remains below the top quartile of Hong Kong dividend payers at 7.64%.

• Click here to discover the nuances of China Resources Gas Group with our detailed analytical dividend report.
• In light of our recent valuation report, it seems possible that China Resources Gas Group is trading behind its estimated value.

Guangzhou Baiyunshan Pharmaceutical Holdings (SEHK:874)

Simply Wall St Dividend Rating: ★★★★☆☆

Overview: Guangzhou Baiyunshan Pharmaceutical Holdings Company Limited operates in the pharmaceutical industry, focusing on the research, development, manufacturing, and sale of various medicinal products including Chinese patent medicines and Western medicines. The company has a market capitalization of approximately HK$53.27 billion.

Operations: Guangzhou Baiyunshan Pharmaceutical Holdings Company Limited generates its revenue primarily from the sale of Chinese patent medicines, Western medicines, chemical raw materials, and natural and biological medicines.

Dividend Yield: 3.5%

Guangzhou Baiyunshan Pharmaceutical Holdings has shown modest earnings growth of 6.8% annually over the past five years, with recent Q1 2024 results reflecting a continued upward trajectory in revenue and net income. The company maintains a sustainable dividend policy, evidenced by a payout ratio of 29.7% and cash payout ratio of 58.2%, ensuring dividends are well covered by both earnings and cash flow. However, its dividend yield at 3.49% is relatively low compared to Hong Kong's top dividend payers. Recent corporate actions include proposed changes to governance structures and an upcoming final ordinary dividend payment set for July 18, 2024, following shareholder approval on May 30, highlighting its commitment to returning value to shareholders despite historical volatility in dividend payments.

• Click to explore a detailed breakdown of our findings in Guangzhou Baiyunshan Pharmaceutical Holdings' dividend report.
• Upon reviewing our latest valuation report, Guangzhou Baiyunshan Pharmaceutical Holdings' share price might be too pessimistic.

Next Steps

• Get an in-depth perspective on all 91 Top Dividend Stocks by using our screener here.
• Invested in any of these stocks? Simplify your portfolio management with Simply Wall St and stay ahead with our alerts for any critical updates on your stocks.
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Ready To Venture Into Other Investment Styles?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.
• Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.
• Find companies with promising cash flow potential yet trading below their fair value.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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