Credit Suisse upgrades China Resources Cement rating

Credit Suisse upgrades China Resources Cement rating
Published: 08 January 2016


Credit Suisse raised its target price for China Resources Cement (CRC) at HKD3 (US$0.39), but upgraded its rating from "neutral" to "outperform".

The research house cited its sources with the Cement Association and the Standardization Administration of China confirming that the proposal for the elimination of PC32.5/PC32.5R grade cement was approved at the internal committee votes in late December – a key step towards the official approval of the policy, making it now a highly-probable event.

The research house estimated the elimination of low-grade cement would reduce the industry's effective capacity by over 20 per cent. Assuming full implementation in 2017, it estimated the utilisation will improve to 95 and 96 per cent in eastern and southern regions, respectively, where CRC has 70 per cent exposure, versus 81 per cent and 82 per cent utilisation without elimination of PC32.5. (Source: ET Net News Agency)