Highway stocks had the highest gains in early trading. As of press release, Guangzhou-Shenzhen Railway shares (00525) rose 8.43% to HK$1.93; Anhui Wantong Expressway (00995) rose 5.14% to HK$8.8; Jiangsu Ninghu Expressway (00177) rose 4.49% to HK$7.91; and Zhejiang Shanghai-Hangzhou—Hangzhou (00576) rose 4.31% to HK$5.08.
The Zhitong Finance App learned that road stocks had the highest increase in early trading. As of press release, Guangzhou-Shenzhen Railway shares (00525) rose 8.43% to HK$1.93; Anhui Wantong Expressway (00995) rose 5.14% to HK$8.8; Jiangsu Ninghu Expressway (00177) rose 4.49% to HK$7.91; and Zhejiang Shanghai-Hangzhou—Hangzhou (00576) rose 4.31% to HK$5.08.
Societe Generale Securities pointed out that the overvalued highway sector has a weak cycle, high entry barriers, and a certain monopoly, so performance is stable, cash flow is abundant, and defensive. As the impact of the epidemic dissipated, the highway sector's performance rebounded steadily. At the same time, in recent years, high-speed listed companies have paid attention to investor returns. A number of companies have issued shareholder return plans, drastically increased dividend ratios and promised high dividend levels for the next few years, bringing definite high dividend returns to investors.
Shanghai Securities, on the other hand, said that the highway sector has many high-quality targets, and its business and dividends are stable, which can bring relatively stable return expectations in the medium to long term; at the same time, when market risk appetite is under pressure, enterprises use net assets as support and have strong defensive properties. Furthermore, the highway industry has entered a period of maturity and stability, so the peak period for corporate expansion and investment has passed. It is expected that there will be plenty of cash to use for dividends every year, and many companies have also continued to increase their dividend ratio in recent years. We believe that in the medium to long term, the dividend rate of expressway companies is expected to remain around 5%.