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*Official* China Merchant Holdings (Pacific)

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Old 24-02-2012, 06:26 AM   #1
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*Official* China Merchant Holdings (Pacific)

Decide to start a topic to create awareness.

A break down of what the company is about and the defensive nature of toll roads here >>

The sustainable of dividends by its toll road earnings here >>

This stock is 81% held by parent China Merchant Holdings, which is a state linked company doing infrastructure.

Do note that free cash flow covers almost 1/3 of their net debts.

Management have a history of paying out > 50% to <75% of earnings, so they do retain the earnings to pay down debts.

Current shares outstanding is 719 mil but there are existing shares that may eventually be diluted to 854 mil shares.

Management likely to placed out shares if price > 75 cents
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Old 24-02-2012, 06:29 AM   #2
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Latest full year results [here]

DBS Vickers have a detail write up of the company here [here]
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Old 24-02-2012, 09:54 AM   #3
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I do like your write-up on StarHub in your blog. I believe you have wrote some great analysis of CMP as well. However, as far as S-Chip are concerned, how would you know if they have not cooked their books? If they really did so, all your analysis would not be correct. Granted, not all S-chips are bad but the wave of problems with these companies send a shudder down my spine. It makes me avoid them until their corporate governance gets better.

Thanks for your analysis.
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Old 24-02-2012, 12:16 PM   #4
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I do like your write-up on StarHub in your blog. I believe you have wrote some great analysis of CMP as well. However, as far as S-Chip are concerned, how would you know if they have not cooked their books? If they really did so, all your analysis would not be correct. Granted, not all S-chips are bad but the wave of problems with these companies send a shudder down my spine. It makes me avoid them until their corporate governance gets better.

Thanks for your analysis.

Thanks Some-one for your frank questions. Those are very valid. And for me i have seen those so call quality China stocks like Beauty China fall from grace.

Still i take my chances with China Merchant Group being a state own enterprise and a more established backer. I do my own risk management and not have it form a large position of it.

What i like is that it used to hold a large pool of cash for a long time but recently put into use buying assets generating higher return on assets. If there is no cash there, then it won't be able to make that purchase in the first place.

The party they bought it from is the parent company. If they indeed do not have the cash there, then the parent company (who owns 81% of cmpacific) is effectively swindling themselves. The subsidiary gain an asset at a much cheaper rate.

Traffic figures for toll roads can be checked up. Toll rates are published. I find that it is much more difficult to be a run in the mill.
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Old 24-02-2012, 03:35 PM   #5
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looks like a good dividend counter to invest, will govt implement new rules to control toll charges?

a good read on china toll road & expressways
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Old 24-02-2012, 04:35 PM   #6
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what is the current yield like?
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Old 24-02-2012, 07:44 PM   #7
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i am in the midst of asking the impact of toll revision.

but think about this: if their toll is affected by recent china clamp down, they wouldn't have ear marked 5.5 cents div for the next 2 years.

as for the yield 5.5/69 = 7.9%
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Old 24-02-2012, 08:50 PM   #8
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i am in the midst of asking the impact of toll revision.

but think about this: if their toll is affected by recent china clamp down, they wouldn't have ear marked 5.5 cents div for the next 2 years.

as for the yield 5.5/69 = 7.9%
I think I read somewhere that one new car is sold in China every 20 seconds.

The auto industry is booming in China.

More cars mean more toll fees collected.

Rise of the Chinese middle-class.

U got me interested in this counter.
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Old 24-02-2012, 09:45 PM   #9
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toll roads are not like what buffett talk about, that u have to use it. most of the major ones are probably are. but depends on whether its connecting important places as well.

they do have signficant down sdies if the govt and the toll road company do not he zhuo in coming up with a contract that is beneficial to both.
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Old 24-02-2012, 09:51 PM   #10
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toll roads are not like what buffett talk about, that u have to use it. most of the major ones are probably are. but depends on whether its connecting important places as well.

they do have signficant down sdies if the govt and the toll road company do not he zhuo in coming up with a contract that is beneficial to both.
Crucial point there. Thanks.
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Old 25-02-2012, 09:54 AM   #11
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Crucial point there. Thanks.
lets wait for the investor relations to revert. i will not be updating their latest results until i ascertain something.
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Old 25-02-2012, 12:21 PM   #12
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lets wait for the investor relations to revert. i will not be updating their latest results until i ascertain something.
Ok. I shall wait. In the meantime, I will look at their past records. Thanks.
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Old 25-02-2012, 12:30 PM   #13
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one thing to note is that they are devlopers in New Zealand property. that is one of the reason they accumulated so much cash.

but now the property scene there is in a bit of a funk.

if it turns better who knows. might get a boost.
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Old 25-02-2012, 01:18 PM   #14
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i am in the midst of asking the impact of toll revision.

but think about this: if their toll is affected by recent china clamp down, they wouldn't have ear marked 5.5 cents div for the next 2 years.

as for the yield 5.5/69 = 7.9%
Given its number it looks good. but psychologically I still scare of s-chips. just being curious, why s-chips asset in China but yet they come sg to be listed?
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Old 25-02-2012, 03:05 PM   #15
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because its easier to get listed in Singapore. but to be honest i see it as that their New Zealand property business Singapore is a closer proximity.

Else they are trying to scam singaporeans.
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