Going gets tough

Downgrade to NEUTRAL
New public infrastructure spending has been slow YTD due to pandemic management and we expect this to persist into most of 2H21. We anticipate two major trends: (i) PFI as the financing mode for new major infrastructure projects; (ii) restructuring of highway concessions – both to alleviate the government’s fiscal burden. Amid a challenging landscape, we prefer stocks with strong balance sheet and delivery track record; keeping our BUY on IJM, GAM and LTK.