China Infrastructure:Looking for quality names amid market volatilities

Significant share price correction recently

    Despite a decent rebound on 9 July, UBS covered Chinese transportation infrastructurecompanies on average retreated 8% in the past one week and 23% in the past onemonth. China Merchants Holdings International (CMHI, -12%) and Qingdao PortInternational (QPIC, +8%) are the corresponding underperformer and outperformeramong UBS covered HK/Singapore listed Chinese transportation infrastructurecompanies. Shenzhen Airport (-29%) and Shanghai International Airport (SIA, -5%) arethe counterparties among UBS covered A-share transportation infrastructure names.

    Sector fundamentals remain solid

    Other than coal-related business, we see most transportation infrastructure industriesdelivering good results YTD: container throughput rose 6% YoY in H115, and therewere tariff hikes at some ports (e.g. Shenzhen and Qingdao); toll road accelerated YTDtoll revenue growth vs. H214; airport passenger/freight YoY growth at 11%/5% in5M15; railway freight