Huatai Research lifted its target price for Yuexiu Transport Infrastructure (01052) to HK$7.8 from HK$6.9 and maintained its "hold" rating.
The research house said Yuexiu plans to acquire three toll roads in Hubei for RMB6bn. Huatai believes the projects have good earnings growth potential due to their advantageous locations, and the IRR of 9.4% seems fair in terms of risk-reward.
Huatai adjusted its earnings estimates to reflect the cost of acquisition (likely to be completed by end-2019). After the transaction is completed, it estimated the operating mileage of Yuexiu-controlled toll roads will increase by 58.7% to 535km, and the weighted average remaining concession period will extend by 1.9 years to 19.1 years.
21/10/2019 13:54
{I-bank focus}Huatai ups Yuexiu Transport (01052) to HK$7.8
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