What the broker says

PUBLISHED : Sunday, 22 May, 2005, 12:00am
UPDATED : Sunday, 22 May, 2005, 12:00am

Macquarie Research has maintained its 'outperform' rating on Hopewell Highway and Shenzhen Expressway after both toll-road operators reported strong figures for last month.

In April toll revenue rose 21 per cent on Hopewell's Guangzhou-Shenzhen superhighway to 8.9 million yuan and 32 per cent on the Guangzhou east-south-west ring road to 1.11 million yuan.

If strong revenue continues in May and June the broker expects a slight upside potential on estimates for this year and next. The price target of $6.8 is based on a 10 per cent discount to the broker's discounted cash-flow value.

Shenzhen Expressway's average daily toll revenue rose 26 per cent to 2.7 million yuan in the four months to April. Revenue growth on its major expressways - Meiguan, Jihe East and Jihe West - was generally ahead of forecasts. Robust operating data should support the share and the target of $3.60.

On Friday Hopewell Highway closed at $5.50 and Shenzhen Expressway at $2.875.