The Company's management guided low single-digit growth in 2019. Onthe other hand, the management predicts that the Company's main drivingforce in 2019 will come from the overseas segment, and it expects overseascontainer volume to record medium-to-high single-digit YoY growth in 2019.Domestic port container loading and unloading operation fee might not begreatly adjusted in 2019, while handling fees of some overseas ports mightincrease. Overall, we expect CMP's port business to generate low single-digitYoY revenue growth in 2019.
Qianhai land ready to release value; the disposal of land interests isexpected to bring about HK$3.58 billion in after-tax income. We believethat China Merchants Port will benefit indirectly from the long-termdevelopment of Shenzhen’s Qianhai Shekou Free Trade Zone. It isunderstood that Qianhai Land will still be developed in accordance with themature development model of the "Port-Zone-City" of China MerchantsGroup.
Reiterate "Accumulate" rating and adjust TP to HK$16.80. CMP’s portresources are still balanced, and we still favor CMP's overseas developmentcapability. As the leader in the Chinese port industry, CMP’s current valuationremains attractive. Our TP represents 6.9x, 8.3x and 7.3x 2019-2021 PER.