Shenzhen Expressway (Draft)

22 Mar

It’s been a long time since I’ve written anything company specific.  Here’s the main points on a piece on a Chinese Toll Road operator.  I hope to flesh it out in the coming weeks with more detail.

Who is Shenzhen Expressway Company (SZEC)?

SZEC construct, operate and manage roads, expressways and bridges.  SZEC’s expressways are located in Guangdong, Hunan, Hubei and Jiangsu province and include the Meiguan Expressway, Yanpai Expressway, Jihe Expressway, Shuiguan Expressway and Wuhuang Expressway.

What’s there do like?

  • The company will benefit from the continuing export recovery in Guangdong (i.e. they are a toll operator in the Pearl River Delta region)
    • Note – foreign trade in Guangdong increased 31% yoy in Jan/Feb 2010.
  • Most diversified portfolio in the Chinese toll road sector
  • The Qinglian Expressway is located in North Guangdong, connected to Hunan province. The company will benefit from continuing economic growth in the region. In the last 10 years Hunan’s GDP has grown at a 14.3% CAGR, well above the national average.
  • Economies of scale from growing network
  • The Yilian Expressway will open in late 2010 / early 2011, and will be directly connected to the Beijing-Zhuhai Expressway- this is one of the busiest expressways in the whole of China
  • Conservative CAPEX plan
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