Bank of America Merrill Lynch published a report stating that it maintains the Hopewell Highway Infrastructure (00737-HK) “selling” rating, with a target price of 3.4 yuan. According to Bank of America Merrill Lynch, Hopewell Highway Infrastructure made a profit of 310 million yuan in the middle of this year, 16% lower than the bank's forecast, mainly due to lower fees and increased operating expenses, which caused the reduction in road fee revenue to exceed expectations. The report explains that maintaining the stock's “selling” rating is due to the fact that the Guangzhou-Shenzhen-Yanjiang Expressway will be further completed by the end of this year, or poses a threat to the Guangzhou-Shenzhen Expressway owned by Hewa Highway, while construction of the third phase of the Western Line is expected to drag down profits. Coupled with the high valuation of the stock, the current price corresponds to a price-earnings ratio of 18.2 times/17.8 times/17.6 times in 2012-14, the highest in the sector. Bank of America Merrill Lynch pointed out that the company's medium-term operating expenses to toll revenue ratio soared by 380 basis points to 13.9% year-on-year, mainly due to increased labor costs and one-time expenses related to the Guangzhou-Shenzhen Expressway. Excluding the impact of one-time expenses, it is expected that the company's cost control will still be under pressure in the future. Due to the huge traffic flow brought about by free passenger cars on holidays, its maintenance costs will increase, and labor costs will also rise further.