[ET Net News Agency, 31 July 2019] Goldman Sachs lowered its target price for Sinopec
Engineering Group (SEG)(02386) to HK$8.05 from HK$8.16 but upgraded its rating to "buy"
from "neutral" noting that risk-reward is now attractive.
The research house believes that SEG is poised to benefit from ongoing downstream capex
strength (particularly petrochemicals) with the current backlog, new orders in 1Q and
potential new orders from upcoming projects underpinning earnings for the next 2-3 years.
At current valuation levels, Goldman believes the shares have become too cheap to
ignore. It said that SEG is trading at historic lows on 12-month forward EV/EBITDA (1.9x)
despite a 25% earnings CAGR (2018-21). (KL)