[ET Net News Agency, 13 June 2018] Citi Research cut its target price for Kingboard
Chemical (KBC)(00148) to HK$50 from HK$56, and retained its "buy" rating.
The research house revised up Brent oil price forecasts to US$75/70 in 2018/19 from
US$65/55, which should sustain KBC's chemical unit margin recovery due to high
correlation.
This margin upcycle is mainly underpinned by wiping out smaller rivals resulting from
China raising environmental standard and SOE de-capacity, Citi said.
Based on the strong rally of most chemical products ASP year-to-date, the divisional
profit will likely double this year with EBITDA margin expansion from 7% in 2017 to 12% in
2018, the research house said. (KL)