[ET Net News Agency, 23 May 2018] Morgan Stanley lowered its target price for China
Merchants Port (CMP)(00144) to HK$19.8 from HK$23.42, and retained its "equal-weight"
rating.
The research house sees positives thanks to its investment in SIPG and strong growth in
overseas terminals. But Morgan also sees negatives from weak fundamentals in Pearl River
Delta and Bohai Rim ports.
It said the price target cut reflects (1) lower earnings estimates for some of its port
assets such as Hong Kong, Shenzhen, and Dalian; and (2) higher net debt owing to overseas
expansion capex.
Morgan raised its 2018 net profit forecast 68% given HK$3.9bn expected disposal gain
from Chiwan Wharf in 2018. Despite the absence of profit contributions from Chiwan Wharf,
it raised 2018 and 2019 recurring earnings forecasts 0.9% and 0.2%, respectively. (KL)