China South car rises 2% Citi turn to buy

China Southern Car, which intends to use a a-share raise for 630 million to replenish its liquidity, has fallen back, and the share price has narrowed to 1.76%, at HK $4.63 and 32.49 million shares.　　Citi's report said it had raised its rating from a sale to a buy, with the target price rising from HK $3.5 to HK $5.6, equivalent to a 25 times-fold price-to-earnings ratio in 2010, which was a premium to that of the Chinese railway construction sector, equivalent to the pinnacle of international infrastructure, at a premium of 21% per cent. Citi points to a drop in revenue from goods vehicles, which is not news for the market as a result of a monopoly on profit margins. It is believed that the upcoming EMU bill may make China's southern car's long-term profitability more clear, and China Southern car than other railway builders enjoy a scarce premium, because it is a more pure concept of railway stocks, has a longer business cycle.