GUANGZHOU Investment is the window company of the Guangzhou government and engages in property development, cement manufacturing, paper production, and infrastructure projects.
Brokerage DBS Securities Hong Kong has put a buy on the stock, saying it is a superb investment play on a dynamic, high-growth city.
Residential property in Guangzhou is showing signs of recovery and Guangzhou Investment, with its huge land bank, is poised to gain.
New investment in low-cost housing projects in Shanghai and Guangzhou will give it a large stream of stable, recurrent income.
The company's infrastructure unit, GZI Transport, has shown substantial growth in traffic, and the expansion of its project portfolio is expected to boost earnings by 340 per cent over the next three years.
Compared with other red chips, the company is undervalued: it is trading more than 40 per cent below its net asset value of $3.44, unusual for a red chip.