The observatory on Monday said it might issue the Standby Signal No.1 between Tuesday afternoon and Tuesday night, with Tropical Cyclone Yagi intensifying into a severe tropical storm.
It said Yagi would be within 800 kilometres of Hong Kong on Tuesday and then edge close to the coast of southern China.
It added there was a high chance Yagi would move towards the vicinity of the western part of Guangdong and Hainan Island and would further intensify.
Looking ahead, the observatory forecast Yagi could strengthen to a typhoon by Thursday.