Elevator Pitch
I maintain my "Neutral" rating on Hong Kong-listed Mainland China toll road company Shenzhen Expressway Company Limited (OTC:SHZNF) [548:HK]. Shenzhen Expressway generates stable and recurring earnings as a toll road operator by virtue of the long-term toll road concessions granted by the government. However, the regulatory moat is a double-edged sword, as Shenzhen Expressway is also subject to regulatory risks.
Shenzhen Expressway's diversification into non-toll road businesses has made the company more resilient against headwinds in its core toll road business this year. But there are concerns regarding "di-worsificiation", with Shenzhen