INFRASTRUCTURE companies are likely to offer the most stable returns among the first batch of 33 mainland companies to be picked by China's State Council for B-share listings this year, analysts say.
'Infrastructure companies offer steady returns and could provide foreign investors good exposure to the Chinese economy in the longer term,' one China fund manager with a British fund house said.
Lawrence Ang, head of China research for Barclays de Zoete Wedd (Asia), said he favoured toll-road companies.
'Prevailing demand for highway stocks is fairly strong. That is why Anhui Expressway's share price has been doing well recently,' he said of the H-share company.
One advantage of highway companies over other enterprises is that they avoid the problem of account receivables - they are not plagued with money owed for goods sold - which has become prevalent due to credit tightening in the past three years.
Mr Ang said highway companies could enjoy higher flexibility by increasing tariffs resulting in stable earnings growth.
