China: UBS lowers CRC target price, earnings estimates

China: UBS lowers CRC target price, earnings estimates
Published: 30 June 2015


UBS Global Research lowered its target price for China Resources Cement (CRC) to HK$4.8 from HK$5.3, and maintained its 'neutral' rating.

The research house said CRC has underperformed the Hang Seng China Enterprises Index (HSCEI) by 39ppt over the past six months, which it attributed mainly to stretched fundamentals in its key market of southern China.

Year-to-date, the average selling price (ASP) of cement in Guangdong and Guangxi provinces has dropped 23.9 per cent in 2015 to CNY295/t (US$48), versus the average 13.9 per cent decrease for China as a whole, according to Digital Cement.

UBS cut China Resources Cement's  2015, 2016 and 2017 earnings estimates by 22, 22 and 24 per cent, respectively, as it believes profitability will be subdued amid sluggish demand growth and the impact of new capacity. (Source: ET Net News Agency).