[ET Net News Agency, 1 August 2019] Morgan Stanley lowered its target price for Sinopec
Shanghai Petrochemical (00338) to HK$2.74 from HK$3 and maintained its "equal-weight"
rating.
The research house said Sinopec Shanghai's 1Q earnings were down by 66%, consistent with
Morgan's view that a chemical downturn has started in 2019. Morgan believes its weak
earnings in 1H and the rest of 2019 could continue to serve as a negative catalyst and
contribute to weak share performance.
Morgan is becoming more bearish on Sinopec Shanghai's fundamentals in the next few
years, given its poor 1Q results and deteriorating industry outlook in 2019. Morgan
therefore cut its earnings estimates by 21-49% for 2019-21. (KL)