JP Morgan expects improved China pricing environment

JP Morgan has raised its target price for BBMG Corp to HK$6.5 from HK$5.5 and maintained its “neutral” rating and sees improved trading conditions in the second half of 2012.

It said that the Chinese company’s nine month results were in line with expectations with the weakness due to sluggish demand and a tough pricing environment throughout the industry.

JP Morgan expects the pricing in the second half of 2012 will be better as new capacities coming on line will be lower and the recent price strength from September should continue towards year-end thanks to seasonal effect and better supplier discipline.