20150612-JEFFERIES-中国外运（0598）：DISPOSING_1.59_STAKE_OF_SINOAIR-332814

Sinotrans announced after market close today that it has reduced its Sinoair（600270.CH）stake by 1.59% from 63.46% to 61.87% in the open market since April.This is in-line with company＇s guidance that it would be seeking to realise some value while retaining majority control.We see this as a positive development as Sinoair currently trades at 27x 2015PE vs.Sinotrans at 13x 2015PE.Valuation/Risks：Our 12-month PT is HK$6.9 based on 16x 2015 PE.Major downside risks include macro economy slows down，depressed consumer demand etc.Upside risks include value accretive asset injections from the parent company.