China Merchants Holdings Pacific

[Nick]

Just look at Singapore - we are a small city with a strong network of affordable public transportation services linked to most parts of the country - yet, we still have a large private car population. Our expressways remain highly utilized during peak hours despite of ERP. What more of a much larger country like China ! Not only, is it a necessity for some, it could very well be a status symbol signifying one's successful class transition. I don't think car ownership will be readily replaced any time soon. I would think regulatory rulings on toll collection would be a much higher risk in this regard.

(Vested)

[touzi]

1. by the time the high speed train is ready several years away, the expressway will be so overloaded and need a relief

Actually the coastal provinces are almost all linked up by now. The YTW high speed line was operational in 2009, just a few months before the expressway was acquired by CMP. Unlike the expressway, the high speed rail is totally funded by the government.

2. high speed train don't serve commercial transportation like carrying of goods.

I thought so too, but search on the internet mentioned both freight and passenger traffic.

3. china don't have a good network of rental car services whereby you can take the train and then rent a car in the destination and relying on taxi would be expensive. so if you already have a car might as well drive there.so the high speed train is more for the masses.

Yes, I agree train is for the masses particularly over shorter distance. At 138 km the YTW expressway is probably not considered long distance.

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Just look at Singapore - we are a small city with a strong network of affordable public transportation services linked to most parts of the country - yet, we still have a large private car population. Our expressways remain highly utilized during peak hours despite of ERP. What more of a much larger country like China ! Not only, is it a necessity for some, it could very well be a status symbol signifying one's successful class transition. I don't think car ownership will be readily replaced any time soon. I would think regulatory rulings on toll collection would be a much higher risk in this regard.

(Vested)

No car ownership will not be threatened by the high speed train roll out. As sure as the sun will rise, China will become a car owning society (vested in related stocks). However car usage may be a different story.

Those of you who owns a car and enjoy driving up north will be in a better position to advise if you will still do so should the high speed rail between Singapore and KL gets implemented.

As for regulatory rulings on toll, I think it may be influenced by the government's view on the economics of the high speed rail program. My impression so far is that the aggressive rail roll out is based on social factors rather than economic viability ( of course some high ranking officials profit enough to own many properties and mistresses ). What if some day the government decided that it needs to make sure that the rails are financially sustainable? If that day comes, regulations will likely make sure that rail is the preferred mode of transport. But I am just speculating.

[Boon]

Infrastructure in China
Sustaining quality growth
By: kpmg
2013

http://www.kpmg.com/CN/en/IssuesAndInsig...201302.pdf

It covers:
- Roads
- Railways
- Metro and light rail
- Ports
- Airports
- Water and waste
- Energy

-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
OPINION
China Road Tolls Policy: Past Achievements and Future Directions
Binyam Reja, Paul Amos, Fan Hongye
China Communications News
June 14, 2013

http://www.worldbank.org/en/news/opinion...directions

[CityFarmer]

If high speed train is a concern for high-way traffic, then probably a boost of budget airline is a next concern?

IMO, both high speed train and budget airline provides fixed point-to-point service. Travel with private car still have the advantage on flexibility of destination. So both shouldn't affect high-way traffic very much...

(not vested)

China mulls steps to boost budget airlines

SHANGHAI — China is considering measures to jump-start its fledgling budget airline market, according to people familiar with the matter, a sign of further liberalisation in one of the nation’s most tightly regulated sectors.

Mr Li Jiaxiang, head of the Civil Aviation Administration of China (CAAC), told a working meeting this month that the regulator would study new policies to promote low-cost carriers in the second half of the year, according to people who attended the semi-annual meeting, which included airline industry executives.

http://www.todayonline.com/business/chin...t-airlines

[Drizzt]

looks like Jacmar is right to be a contrarian.

[pianist]

Just look at Singapore - we are a small city with a strong network of affordable public transportation services linked to most parts of the country - yet, we still have a large private car population. Our expressways remain highly utilized during peak hours despite of ERP. What more of a much larger country like China ! Not only, is it a necessity for some, it could very well be a status symbol signifying one's successful class transition. I don't think car ownership will be readily replaced any time soon. I would think regulatory rulings on toll collection would be a much higher risk in this regard.

(Vested)

agree with u..
train, bus cannot smoke
drive own car can smoke inside
once i saw one old granny driving and smoking in china
and my shanghai friend told me got car plate no from xinjiang drives all the way 12,000 km from there to shanghai for sightseeing

[Jack31]

looks like Jacmar is right to be a contrarian.

I'm so looking forward to u and Nick analysis!
Biggest pie in my portfolio.

1st look seems quite good to me, thou NZ properties business make far less profit than I expect.

[Drizzt]

NZ properties are turnning around, they may have prospective buyers if this continues

[pianist]

Infrastructure in China
Sustaining quality growth
By: kpmg
2013

http://www.kpmg.com/CN/en/IssuesAndInsig...201302.pdf

dneed to be a member to access this report & their database?

[Nick]

China Merchants Holdings (Pacific) posts 37% rise in net profit in 1H2013
Company declares interim dividend of 2.75 cents

http://infopub.sgx.com/FileOpen/1H2013-P...eID=251302 [Press Release]

http://infopub.sgx.com/FileOpen/1H2013-R...eID=251301 [SGX Announcement]

http://infopub.sgx.com/FileOpen/1H2013-A...eID=251303 [Toll Stats]

http://infopub.sgx.com/FileOpen/1H2013-P...eID=251304 [PPT Slides]

Results are steady with little surprises. Its all within my expectations. The Group generated FCF of HK$1.048 billion in 1H 2013 of which HK$0.11 billion was used to pay a dividend to YTW Minority interest. This FCF includes the HK$0.3 billion dividend receipt from the JV roads. Debt has been reduced over 1H 2013 with net debt (includes dividend payable) falling from HK$3.56 billion to HK$2.89 billion in the first 6 month of the year. Operationally, all the roads recorded growth in traffic volume and profitability. Even the much forgotten property development business in NZ recorded pre-tax profits. The sale of this division at book value will help unlock further value in the Group since the proceeds could be used to finance new acquisitions or repay debt.

My only question is - did CMP use the 5 year US$150 million loan facility raised a few months ago to refinance Beilun Expressway debt ? It would explain why Beilun profit contribution increased substantially in 2Q 2013 due to interest savings from cheaper offshore loans. Moreover, in pg 5 of the FS, it mentioned that it injected shareholder loans into Beilun subsidiary so could this be the proceeds from the offshore loan ? In any case, barring a major regulatory action or natural disaster or any unforeseen negative events, CM Pacific should continue to be able to repay its debt, pay a decent dividend to shareholders and possibly make new acquisitions to grow its portfolio.

CMP last traded at 83.0 cents so this translates to a dividend yield of 6.6%.

(Vested)