In a research report, Morgan Stanley analyst Jim Lam wrote: "In line with its strategy, we believe China Merchants will continue to look for opportunities to exit from its remaining noncore assets, including a 64 percent stake in marine paint business Hempel-Hai Hong, 14 percent in Hong Kong Western Harbour Tunnel and 20 percent in Asia Freight Terminal." Morgan Stanley
estimated these noncore assets are worth about HK$2.5 billion.China Merchants
agreed to sell its Singapore-listed toll road unit to parent China Merchants Group
for HK$2.95 billion, according to a company statement Thursday.Lam
estimated the port operator's net gearing ratio will come down to about 30 percent from 45 percent.
"In our view, increased funding capacity should facilitate China Merchants
to further expand its port portfolio," Lam
said in the report.