Yuexiu Transport Infrastructure Ltd. (01052.HK) has been lagging its bigger rivals this year in share price performance. Improved operating figures, as revealed by the October numbers, could however change that situation.
Yuexiu’s expansion focus in recent years — mid- and western China — appear to be paying off as economic activities in the policy-blessed regions continued to expand. Toll revenues of the firm’s Weixu Expressway, Han-Xiao Expressway and Cangyu Expressway all saw high double-digit growth. New local traffic rules, deteriorating conditions of neighboring roads and reconstruction works of competing roads drove extra traffic to Yuexiu’s toll road networks.
Continuous growth of car ownership boosted toll revenue at Yuexiu’s core mature assets such as GNSR Expressway as well.
Compared with Jiangsu Expressway’s (00177.HK) 24 percent year to date share price surge and Zhejiang Expressway’s (00576.HK) 18 percent gain, Yuexiu has underperformed significantly, posting just a single-digit uptick. That leaves plenty of room to catch up. High dividend yield and the lower price-earnings multiple should eventually draw the attention of the market.
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