JP Morgan: Optimistic about Chinese toll road stocks, first choice is Jiangsu Express (00177)

JP Morgan has released a report stating that it is optimistic about Chinese toll road stocks, believing that this sector will see a revaluation of valuation multiples as the investment thesis shifts from stability and defensiveness. The bank expects that the final version of the amendment to the "Regulations on the Management of Toll Roads" aimed at protecting the interests of toll road operators could significantly reshape the investment narrative of this sector. The preference order for Chinese toll road stocks is JIANGSU EXPRESS(00177)>ZHEJIANGEXPRESS(00576)>Jiangsu Expressway(600377.SH). The bank explains that JIANGSU EXPRESS is the top choice mainly due to its ongoing road expansion and a 5.6% dividend yield, expecting it to benefit from policy changes and provide a buffer during market volatility. The bank also likes ZHEJIANGEXPRESS for being the lowest-valued toll road company. JP Morgan's investment ratings and target prices for mainland toll road stocks are as follows: JIANGSU EXPRESS(00177 / buy / HK$11), ZHEJIANGEXPRESS(00576 / buy / HK$6.8), Jiangsu Expressway(600377.SH / neutral / RMB 16.6).