UBS Group predicts a dividend yield of 7.6% for China Mer Port (00144) in the 2024 fiscal year.
According to the report from UBS, China Mer Port (00144) "buy" rating is reaffirmed. This is based on better-than-expected performance in the first half of this year, conservative forecasts for capital expenditures in the fiscal years 2025 to 2026, and attractive valuation of its shares. The target price has been raised from HKD 15.4 to HKD 15.6. In addition, UBS has raised its net income forecast for the group in the fiscal years 2024 to 2026 by 2% to 4%. The dividend yield forecast for 2024 is 7.6%, which is attractive, with an expected dividend per share of HKD 0.89.
According to the report, the group's recurring net income in the first half of this year increased by 25% year-on-year, exceeding market and bank expectations. In addition, the interim dividend distributed by the company was unexpected and may indicate a willingness to increase the full-year dividend. The bank cited updates to the management's business guidelines, including an upward revision of the 2024 fiscal year volume growth guidance from low single digits to mid single digits to high single digits; the 2025 volume growth guidance is low single digits to mid single digits, with the potential for faster growth in overseas port volumes compared to domestic port volumes in China; there is potential for freight rates to increase in the fiscal year 2025; potential investments in new ports in Southeast Asia, Latin America, Africa, and the Middle East.