According to the Zhitong Finance APP, Conch Venture (00586) is now up more than 5%. As of the release of this report, it is up 5.3% at HKD 7.15 with a turnover of HKD 165 million.

GF Sec stated that Conch Venture is a holding platform for Conch Group's employees. The labor union and individual employees hold the main shares. The current main assets/projects include an indirect equity interest of 18% in Conch Cement and a solid waste project with a capacity of 59,000 tons per day. With the operation of the existing project, the company's cash flow will increase by more than 2 billion yuan per year, and the dividend payment ability/stability will be significantly improved as it shifts from relying on unstable dividend income from joint ventures to its main business.

The bank pointed out that the company holds an 18% equity interest in Conch Cement with a theoretical market value of HKD 23.6 billion, while the current market value of the company is only HKD 11.3 billion. It is expected that the profits and dividends of Conch Cement are likely to bottom out and stabilize. With the cessation of 'blood sucking' from the main business, cement dividends will be paid to shareholders, and this equity asset is expected to undergo a value re-evaluation.