[ET Net News Agency, 15 November 2018] HSBC Global Research raised its target price for
Hopewell Highway Infrastructure (HHI)(00737) to HK$4.8 from HK$4.38 and upgraded its
rating to "buy" from "hold".
The research house thinks HHI's new shareholding structure offers more opportunities in
addition to the existing toll road business. The majority owner with 71.8% shareholding,
Shenzhen Investment Holding Capital (SIHC) could offer potential asset injection
opportunities for Hopewell. SIHC's asset portfolio includes financial services, high tech
industry park operation and industry investment.
HSBC also believes that HHI's core business (toll road operation in Pearl River Delta)
would benefit from the Hong Kong-Zhuhai-Macau Bridge, which started operation at the end
of October 2018. Traffic on the bridge is still in a ramp-up phase and the Guangdong
provincial government is considering opening the bridge to all Hong Kong and Macau
vehicles (780,000 vehicles in total) to travel to China. This may increase bridge traffic
significantly and boost the company's Western Delta Route (30% of revenue) traffic growth.
HSBC expects HHI's 100% dividend payout policy should remain intact and offers a 5.8%
sustainable dividend yield for FY2019. (KL)