Analysis | Transport, property stocks to gain from southern China’s Big Bay Area
The Big Bay Area, which encompasses Guangdong province, Hong Kong and Macau, will have a combined population of 100 million, with a 2016 economic output of US$1.36 trillion, ranking it as one of the world’s largest bay-area economies
The transportation and property sectors are set to become the winners of the Guangdong-Hong Kong-Macau Big Bay Area (粵港澳大海灣), a regional development plan that is most likely to be led by Hong Kong, analysts said.
“There are three world-class port cities in the big bay area, namely Hong Kong, Shenzhen and Guangzhou,” China Merchants Securities analyst Zhang Xia said in a research report. “The area is going to be a pivot to the ‘Belt and Road Initiative’ and will probably become the world’s fourth bay area” after Tokyo, San Francisco and New York.
Property and transportation stocks will be the major winners while more investment opportunities in industries such as tourism and financial services will emerge as the big bay area develops into a technology and financial hub in southern China.
Stocks that may benefit include Shenzhen Airport, Guangzhou Baiyun International Airport and Cosco Shipping Specialised Carriers, all listed on the mainland.
Hong Kong-listed China International Marine Containers Group and Shenzhen Expressway were also cited as potential beneficiaries.
Among port operators, the report cited Shenzhen-listed Zhuhai Port, Shenzhen Yan Tian Port Holding and Shenzhen Chiwan Wharf Holdings.
The Hong Kong-Zhuhai-Macau Bridge, which is expected to complete construction by the end of 2017, would reduce the driving time from Hong Kong to Macau or Zhuhai from three hours to a mere 30 minutes, largely enhancing the transportation capacity, Dongguan Securities analyst Huang Xiuyu wrote in a research report.
