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China Merchants earnings dip in Q1

LOW oil prices and accommodative monetary policy in China will likely help to keep its toll road business on track despite signs of a slowdown in the Chinese economy, said toll road operator China Merchants Holdings (Pacific) as it posted a dip in first-quarter net profit on Thursday.

The company's net profit for the three months ended March 31 slid 4 per cent to HK$142.3 million from the previous year.

This came despite revenue rising 6 per cent to HK$494.3 million in the same period, which the firm said was mostly due to revenue growth from the Yongtaiwen Expressway and the consolidation of revenue from the Jiurui Expressway which it bought in September 2014.

The company said in a statement that the net profit drop was due to a one-off gain in Q1 2014. It added that its toll roads in China "continued to enjoy a steady growth in traffic volume and toll revenue in the first quarter of 2015".

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Earnings per share for Q1 dropped to 13.45 HK cents from 20.58 HK cents the preceding year. Net asset value per share grew to HK$6.17 as at March 31, up slightly from HK$6.10 as at Dec 31.

China Merchants shares were flat at S$1.18 on Thursday.