Yangtze River Infrastructure will be listed for the second time in London on August 19. Compared with its British peers, its valuation is at a discount level, which is expected to push up the stock price.
The Zhitong Finance App learned that Citi released a research report saying that the net profit of Changjiang Infrastructure Group (01038) rose 2% year on year to 4.311 billion yuan in the first half of the year, and more importantly, the mid-term dividend per share rose 1.4% year on year to 0.72 yuan. It reaffirms its “buy” rating and continues to be the first choice among Hong Kong utility stocks. The target price was raised from HK$62 to HK$63.
The bank pointed out that mergers and acquisitions can increase Changjian's additional profit. It is estimated that Changjian and its electric energy industry (00006), which has 36% interest, can use up to 3 billion US dollars and 2 billion US dollars for mergers and acquisitions, respectively. Assuming that the acquisition cost is 40% of the share capital and the return on investment is 10%, Changjian's net profit in 2025 can increase by up to HK$1.16 billion or 12.4%.
Furthermore, Yangtze River Infrastructure will be listed for the second time in London on August 19. Compared with its British peers, its valuation is at a discount level, which is expected to push up stock prices; and US interest rate cuts will drive up the valuation. Citi expects the US to cut interest rates by a total of 225 points between September this year and June next year; assuming that the yield on US ten-year treasury bonds falls from the current level of about 3.85% to about 3%, it is estimated that the long-term construction stock price could increase by 17% (assuming that its yield falls from 4.6% to 3.92%).