tag:blogger.com,1999:blog-25714039.post8866066854544855064..comments2023-10-26T00:17:28.411+08:00Comments on A Private Portfolio: Jiangsu Expressway purchasedtraineeinvestorhttp://www.blogger.com/profile/05179861120801348035noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-25714039.post-84705961043486971692011-09-26T15:47:26.439+08:002011-09-26T15:47:26.439+08:00My HK$0.02 worth is that in general tolls are not ...My HK$0.02 worth is that in general tolls are not too high. If you look at the ROA and ROE of the toll road operators in general and take into account the life of the concessions, its difficult to argue that the tolls are too high. While it is true that the cost of an asset is not a determinant of the price of the services sold off the back of that asset, if toll roads were expected to be at lower levels, many of the roads would either not have been built or would have required a longer concession term and/or bigger subsidies. <br /><br />Consumers will always claim that prices are too high - so I don't place much store in that.<br /><br />Governments the world over are very quick to push costs away from consumers where they can - it makes them more popular, so I don't accept the PRC government's assertions either. A look at the losses they are causing Sinopec and Petrochina illustrates the point very nicely.<br /><br />I expect Q2 revenues to be affected. I don't know by how much. Lower toll charges will mix with rising operating costs, higher traffic, changes in debt levels and (for some opperators)<br />expanded sources of revenue. Your guess is as good as mine, but the market seems to be assuming lower <br />future earnings.<br /><br />Cheers<br />traineeinvestortraineeinvestorhttps://www.blogger.com/profile/05179861120801348035noreply@blogger.comtag:blogger.com,1999:blog-25714039.post-52559037336697696692011-09-23T07:44:15.537+08:002011-09-23T07:44:15.537+08:00What do you think of the measures instituted by th...What do you think of the measures instituted by the PRC government, as well as public opinion in China that the tolls are generally too high? The first reports of China's government interference only came out in Jun 15, and would not have affected Q1. Do you think Q2 would be greatly affected?Darylnoreply@blogger.com