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2009-6-24 12:09:00 p.m. HKT, XFNA
DJ MARKET TALK:Citi Starts Hopewell Highway At Buy,Target HK$4.80
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| 1155 [Dow Jones] STOCK CALL: Citigroup starts Hopewell Highway Infrastructure (0737.HK) at Buy, sets target at HK$4.80, implying FY09-10 P/Es of 12.2X, 12.9X. Expects FY09 core earnings to rise 40%, mainly on traffic recovery after maintenance works on the Xintang- Dongguan section. Says dividend yield attractive after management proposes more than 100% dividend payout ratio on core earnings from FY09 onward vs previous target at 75%; estimates excluding special dividends, FY09-10 dividend yields at 9.1%, 8.6%, highest in sector. Adds, traffic diversion from G-S Coastal Highway in distant future as competitive road's construction to completed end-2011 at earliest. Estimates stock trading at FY09-10 P/Es of 11.0X, 11.6X vs peers Jiangsu Expressway's (0177.HK), Zhejiang Expressway's (0576.HK) historical averages of 15.7X, 13.3X. Shares +0.7% at HK$4.31. (LES) Contact us in Hong Kong. 852 2802 7002; MarketTalk@dowjones.com
(Delayed by 1 hour)
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