Smart buy on the cards from Dr. Check, The Standard HK:-
One stock that lost HK$400 million in market valuation last year is worth a fresh appraisal.
Beijing Development (Hong Kong) (0154) provides smart-card systems in the capital. Its biggest shareholder is Beijing Enterprises (0392), the business arm of the municipal government.
Beijing Development has issued more than 25 million cards, through which around 14 million transactions are conducted daily on public transport and in hotels and convenience stores.
The capital's finance bureau provided Beijing Municipal Administration & Communications Card, a Beijing Development unit, with a 100 million yuan (HK$113.5 million) subsidy for card settlement handling charges. But because BMAC has yet to conclude a profit- sharing agreement with bus and subway operators, it has not contributed any profit.
This explains why Beijing Development is making a loss despite despite having a well- developed smart card system.
Dr Check believes a deal can be reached in the future. When this happens, Beijing Development will see profits.
The stock has fallen from HK$5 in 2007 and now hovers between 90 HK cents and HK$1.40, closing at HK$1.15 yesterday. Its downside should be limited as the net asset value per share is HK$1.17.
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