Ubs: Raises Target Price of Zhejiang Express (00576) to HKD 7, Upgrades Rating to "Neutral"

UBS released a research report stating that ZHEJIANGEXPRESS (00576) saw a narrower decline in toll road revenue in May, at 1%, performing better than market expectations. Considering that the impact of the US-China trade war on mainland highway truck traffic is relatively mild, the fundamentals are improving. They have upgraded their investment rating from "sell" to "neutral" and raised their target price from HK$5.5 to HK$7. UBS expects ZHEJIANGEXPRESS's revenue to rebound in June, and has raised their toll revenue growth forecast for the next two years to 2.3% and 2.6%, respectively. Based on the milder than expected tariff impact, they have also raised their profit forecasts for 2025 to 2027 by 5% to 9%, and dividend forecasts by 3% to 9%. They believe that dividends will remain relatively stable.