At times we can get quite optimistic in projecting a high yield dividend stock. Toll roads generate a lot of cash flows but there are much downside as well.
Maintenance of roads and upgrading of toll technology
When road is being used too much, authorities will need to relay or fix roads. To improve collection of tolls, investment in technology in the future may be necessary.
These will increase capital expenditure
Changes in government policy
The china government have been trying to reduce toll charges to ease consumer inflation burden. This is also to reduce toll gate congestion and cut car emissions.
Cabinet has approved a proposal for all cars and motor bikes to travel toll-free during four main national holidays, namely the Spring Festival (Chinese New Year), Tomb Sweeping Festival, Labour Day and National Day.
The measure applies to both local toll roads and expressways.
Measures like this ......