not vested
Upward path on earnings prospects Reiterate BUY, raised FY17/18F earnings by 10%/29%. Since our last report dated 24 October 2017, cement selling prices in China have been upbeat, led by price rally in East and Central China (accounting for 58% of Conch’s sales volume), mainly due to low inventory from supply discipline.
Kiln closures in Shandong and Henan for winter heating season (15 November 2017 to 15 March 2018) have been well executed.
In 4Q17, average cement selling prices in East and Central China had hiked 29% q-o-q (or Rmb78/t) and 25% q-o-q (or Rmb66/t) respectively.
Based on strong cement gross profit margin at end-December, we expect 1Q18 cement profitability to be upbeat.
We have upgraded FY18F unit GP to Rmb110/t vs Rmb88/t forecast previously.
Valuation:
We raised our H-share TP to HK$52.74, led by earnings upgrade. Our Hshare target valuation is pegged at an unchanged
12.0x FY18F PE. The positives include possibly upbeat 1Q18 cement profitability, continuous low cement & clinker inventory, FY17F dividend payout hike and business development of aggregates.
Our A-share TP is hiked to Rmb40.35.
Source: DBS
https://researchwise.dbsvresearch.com/R ... VyaWRAQA==
It's all about "how much you made when you were right" & "how little you lost when you were wrong"