The Trump administration overturned a federal congestion pricing plan on February 19, although the US subsidiary of ST Engineering, analysts predict It will only slightly suppress investor sentiment and have a minimal direct impact on Xinke Engineering's stock price.

New York City, USA, will charge tolls on vehicles entering the busiest areas of Manhattan starting from January 5, becoming the first city in the United States to collect traffic congestion fees.

In November last year, when Xinke Engineering released its third-quarter results, it disclosed that TransCore received $1.7 billion (S$2.275 million) to develop and maintain backend systems and operate customer service centers for various toll roads and bridge agencies in New Jersey.

DBS Research pointed out that TransCore has completed the engineering, procurement and construction phases in the contract with the Metropolitan Transportation Authority of New York, and is not considered to have a significant financial impact on the new science project. This development will only slightly disappoint investors.

DBS Research estimates that affected operations and maintenance account for only 2% to 3% of Xinke Engineering’s urban solutions business, accounting for less than 1% of the group’s total revenue.

Further reading

Xinke Engineering won a new contract of 4.3 billion yuan in the fourth quarter of last year

Xinke Engineering won a new contract of 4.3 billion yuan in the fourth quarter of last year

Xinke Engineering obtained Korean Air's engine maintenance contract

Xinke Engineering obtained Korean Air's engine maintenance contract

Morningstar believes that Xinke Project has received contract funds for establishing a system, so the impact is very little.

Since the issuance of this contract was controversial, Xinke Engineering did not include the contract in the order book. Therefore, DBS said that because the market was not familiar with it before the plan was launched, coupled with the political rebound, the market should not have transferred this traffic. Congestion fee contract pricing.

DBS Group retains a buy rating for Xinke Engineering with a target price of RMB 5.40. As of 4:20 pm on Tuesday (February 25), Xinke Engineering's stock price fell 0.98% to 5.05 yuan.