I recommended Sichuan Expressway to my followers on InvestingNote on 31 March 2025, with a target price of HK$4.44, when the stock was trading at HK$3.77.
The company had just released its FY2024 results, which were
strong, along with a solid dividend declaration. The dividend was RMB 0.29
(equivalent to HK$0.31428) per share, with an ex-dividend date of 4 June. At
the price of HK$3.77, its P/E was 7.37x and the dividend yield stood at 8.25%.
I noted in my post that the target price of HK$4.44 would have
yielded 7% dividend, a level that had been attractive to Sichuan Expressway’s
investors from past data. I also mentioned that if the company began to show
signs of evolving into a growth stock, the share price could climb
significantly higher.
On 30 April, Sichuan Expressway announced its 2025 Q1 results,
reporting a 17% year-on-year increase in attributable profit. EPS rose 11%,
from RMB 0.1280 to RMB 0.1425. The strong growth appears sustainable, which
supports a more optimistic outlook. As a result, I have revised my target price
upward by 20%, to HK$5.30.
As of 21 May, the stock closed at HK$4.58, marking a 21.5%
gain and surpassing my original target of HK$4.44 set on 31 March. I am looking
forward to it reaching my updated target of HK$5.30!
Superphang
http://superphang.blogspot.sg
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