JP Morgan upgrades Anhui Conch

JP Morgan upgrades Anhui Conch
Published: 13 January 2011

JPMorgan upgrades Anhui Conch of China to Overweight from Neutral after the company issued a profit alert earlier this week, indicating its 2010 preliminary earnings were up my more than 50% on-year, ahead of JPMorgan’s previous forecast for a 29 per cent rise.

"We believe the surprise alert was primarily driven by the solid cement prices since August when the Chinese government imposed restrictions on power usage, which led to supply shortages, followed by the 4Q peak season and supplier discipline."

The house raises its FY10-FY11 earnings forecast by 18%-28% to reflect higher prices and margin assumptions.