Introduction to stock
China Merchant Pacific (CMPacific) is a subsidiary of China Merchant Group. This holding company primarily acquires toll roads and operates them to earn a meaningful cash flow.
They were not listed via normal means but a reverse takeover of an ailing property developer business that seeks development in the country of New Zealand. Since 2004, they have moved into the business of operating toll roads.
In this article, we look at the profitability of the stock, it’s stability, valuation as well as the business and any economic moats involved.
Business / Economic Moats
Value investing books have explain why famed value investor Warren Buffett likes business that exhibits toll road behavior. They ensure that there is
- no competition
- protects profit margins
- at the same time has a certain factor that keeps up with inflation
Currently, the majority of CMPacific’s HKD 2.8 bil assets is invested in ......
