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China Merchant Pacific (CMHP) acquires Ningo-Beilun, will pay out 5.5 cents dividend next two years
By Investment Moats  •  August 11, 2012


China Merchant Pacific (CMHP) acquires Ningo Beilun, will pay out 5.5 cents dividend next two years 3576710825 d4199e11fc

China Merchant Pacific (CMHP), a subsidiary of China Merchant Holdings, the China state-owned enterprise, acquires another expressway, a day before they announces their latest quarter results.

For my past articles on CMHP, you can view them [here]

To date, CMHP now owns 4 toll roads: Guihuang, Guiliu, Yongtaiwen (YTW) and now Beilun (BL).

Beilun will likely be funded by debts.

The quarterly results shows that Guihuang have falling traffic. Guiliu and Yongtaiwen have been stable.

Leveraged infrastructure play

The thing that people notice when glancing at the balance sheet is that CMHP have quite a lot of debts. Like most infrastructure and utility stocks, it is not uncommon to see 50% debt to asset ratio.

CMHP’s debt before the acquisition of Beilun was pretty good. They funded a HKD$2.7 bil purchase of YTW with part debts and part cash (they were net cash).

A caveat is that ...

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By Investment Moats
Investment Moats is set up by Kyith Ng and have been around since 2005. He aims to share his experiences making sense of money, how money works and ways to grow his money. It hopes that by sharing his experiences, both good and bad, season investors can advice and critique his decisions and new investors can learn from them and find their own style ...
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