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Just took a brief look as I am outside, seems than Beilun is still not picking up and surprisingly, YTW revenue I still growing due to a new bridge opening up. Shall take a good look once I am back home.
(Vested)
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Yup, as expected, beilun profit dropped and the rest increase. Might take a few quarters to recover. Should see more conversion of CB giving pressure to the share price in the near term.
1 thing I don't understand. Guihuang traffic drop by 12% but revenue up 15% ??? toll increase?
Any1 can enlighten me the possible reasons?
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07-08-2014, 11:52 PM
(This post was last modified: 07-08-2014, 11:53 PM by Jack31.)
Don't really understand the benefits of the upgrading. Wonder why they spend so much to upgrade when beilun toll collection period is only for 9 more years ( with option to extend). Higher toll price maybe? Or able to increase the traffics after the upgrade? Not much info on the benefits. Just need to trust the management perhaps. They should have some good reasons for the upgrade.
On the other hand, Nice div of 3.5c!
Standby here waiting for Nick's comment.
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Two interesting points -
1) CMP paid HK$75 million to the JV roads as a loan. Could this be for capex at Giuhuang for the building of the new road ?
2) I suspect the bridge upgrading in Beilun could be contingent on raising the concession expiry from 2023 to 2027. Just my speculation. Could also be necessary to arrest the fall in traffic volume ie wider roads and smoother traffic.
Overall a fair result with 7 cents dividend likely to be maintained. YTW looks to be a shrewd acquisition while Beilun don't seem to be healthy at the moment. Bet debt to equity is low at 20% and the JV roads made its dividend payment of HK$340 million this year. Dividend payable to CMG has been reduced as well.
I continue to be vested and I hope organic growth in Jiurui would propel CMG towards further profit and dividend growth.
(Vested)
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.
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Nothing new here from DBS Vickers as we cannot expect analysts to analyse conspiracy theories. However, we do need them to set target prices:
Interim dividend raised to Scts3.5
Core earnings growth of 9.5% y-o-y in 1H14 is in line with
expectations, driven by growth in the toll road business
Interim dividend raised to Scts3.5 from Scts2.75 a year
ago as the Group continues to generate firm cash flow
Completion of Jiurui Expressway acquisition by year end
should help further drive long-term earnings growth
Maintain BUY and S$1.32 TP
Highlights
Steady growth from toll road business. Excluding earnings from
discontinued operations, net earnings grew by 9.5% y-o-y to
HK$333m on higher toll revenue and lower interest costs.
Contribution from Yongtaiwen Expressway (+7% y-o-y to
HK$85.9m) was better than expected but offset by lower
contribution from Ningbo-Beilun Port Expressway (-38% y-o-y to
HK$19.8m). Meanwhile, both Guiliu (+4% y-o-y to HK$39.5m) and
Guihuang (+5% y-o-y to HK$37.2m) also grew their contributions.
Net one-off gains of HK$64.1m from disposed NZ property
business. CMH also booked a gain of HK$68.4m in the second
quarter to bring net contribution from the disposed NZ property
business to HK$64.1m. This brought total net profit growth for 1H14
to 31% y-o-y to HK$397.3m for CMH.
Our View
Organic growth to continue. We expect the Group’s existing toll
roads to continue to post mid to high single-digit earnings growth
over the medium-term, as traffic on China’s roads keeps climbing.
Meanwhile, the Group’s financial position continues to improve with
the strong cash flow generated from operations. Free cash flow in
1H14 (including dividends received from JVs) was over HK$900m.
Jiurui E’way acquisition to drive future growth. The proposed
acquisition of Jiurui E’way would help expand the Group’s business,
lengthen the average remaining concession of the road portfolio and
improve its future earnings prospects. While we await the
completion of the transaction before changing our estimates, we
expect this deal to be positive for shareholders, even after taking into
account the dilution from the issue of new shares as part
consideration for this acquisition.
Recommendation
Maintain BUY and S$1.32 TP. The higher interim DPS of Scts3.5
firmly signals the Group’s intention and capability to maintain a high
payout. The stock is trading at an attractive dividend yield of nearly
7.5% and is still below book value. Re-iterate BUY.
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Surprisingly, no report from CIMB. It should be noted that if the 7 cents dividend is maintained this year, the CB conversion price will decrease further to around 80 cents hence greater dilution. The upcoming EGM will be interesting.
(Vested)
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.