[ET Net News Agency, 12 January 2021] Goldman Sachs lowered its target price for CITIC
Ltd. (00267) to HK$6.7 from HK$9.8 and maintained its "neutral" rating.
The research house cited CITIC management from an analyst meeting sounding cautiously
optimistic about a business recovery in selective divisions from COVID-19 in recent
months, e.g. pickup in market activities for securities, higher steel and iron ore prices
toward year-end.
Goldman said the Rmb100bn net profit target by 2025 implies 14% CAGR from Goldman's
projected Rmb51bn earnings for CITIC in FY2020. Considering that 76% of group earnings
still come from the low-growth financial services businesses, it would have to deliver
significant growth from its non-financial businesses to make up the difference.
Despite the dividend cut in the first half due to unusual circumstances, management
guided that they will try to maintain a steady dividend for the full year, which if true,
would imply an 8.1% dividend yield based on the current share price.
Goldman raised its FY2020-22 EPS forecasts for CITIC by 1-7%. (KL)