Jiangsu Expressway:11%9M16recurring NP growth beat expectation;traffic recovery observed in Aug/Sept
Q: How did the results compare vs expectations?
A: Q316/9M16 net revenue fell 4%/5% YoY, in line with our expectation (due to thedecline of ancillary services and delayed recognition of property sales). But 9M16 pre-xnet profit beat our expectation (due to lower than expected finance cost) by growing11% YoY, representing 81%/82% of UBS/consensus full year estimate.
Q: What were the most noteworthy areas in the results?
A: Truck traffic on Shanghai-Nanjing E'way showed two consecutive months of positivegrowth in Aug/Sept and management also highlighted traffic recovery on all otherexpressways. Rmb170m property pre-sale recorded in Q316, bringing unrecognisedproperty revenue to Rmb1.56bn. 9M16 finance cost dropped 37% YoY due to debtswap on the high-interest debt inherited from the two acquisitions in 2015.
Q: Has the company's outlook/guidance changed?A
: No guidance provided.
Q: How would we expect investors to react?
A: We expect investors to react positively to the strong result.