Highway stocks rebounded in the morning trading. As of the date of publication, Jiangsu Expressway (00177) rose by 2.83% to HKD 7.64, Anhui Expressway (00995) rose by 2.33% to HKD 9.67, Shenzhen Expressway (00548) rose by 0.79% to HKD 7.7, and Yuexiu Transport Infrastructure (01052) rose by 0.53% to HKD 3.76.
Highway stocks rebounded in the morning trading. As of the date of publication, Jiangsu Expressway (00177) rose by 2.83% to HKD 7.64, Anhui Expressway (00995) rose by 2.33% to HKD 9.67, Shenzhen Expressway (00548) rose by 0.79% to HKD 7.7, and Yuexiu Transport Infrastructure (01052) rose by 0.53% to HKD 3.76.
Everbright Securities pointed out that on May 22, the Ministry of Transport announced the "Legislative Work Plan of the Ministry of Transport for 2024." Officials from the Legal Affairs Department of the Ministry of Transport revealed that the ministry has clarified the main tasks of transportation legislation in 2024, including the revision of the management regulations of toll roads. According to the 2018 "Management Regulations of Toll Roads (Revised Draft)", the operating period of operating highway projects should be determined based on the principle of recovering investment and having reasonable returns, generally not exceeding 30 years. For toll highways with large investment and long return periods, the operating period can exceed 30 years. If the toll period of expressways is increased, it will significantly boost the long-term value of expressway assets.
Dongxing Securities believes that the market's demand for stable returns is not a short-term change but a long-term trend; the interest rate cut cycle further increases the safety margin of highway stocks; the performance growth brought by renovation and expansion and the extension of toll collection years are expected to bring about both performance and valuation. Therefore, we expect that for a long period of time in the future, the highway sector will benefit from the industry's upward cycle and the improvement of corporate governance, and investment value will continue to be highlighted.