[ET Net News Agency, 21 September 2018] HSBC Global Research lowered its target price
for China Everbright International (CEI)(00257) to HK$8.9 from HK$9.9 considering other
macro factors, and maintained its "buy" rating.
The research house said CEI's fundamental operations are intact and it sees concerns on
this rights issue fading, with completion set for 24 September.
HSBC said CEI has 54 waste to energy (WTE) projects in operation with processing
capacity of 46k tonnes per day (tpd) as of September 2018. With another 35 WTE projects at
34k tpd in the pipeline, HSBC expects capacity to reach 70k by 2020e (+79% from the 2017
level).
Operations are ramping up strongly with adjusted earnings without construction
services (derived from IFRIC 12) at 31-69% growth over 2018-19 (1H18: +71% YoY), better
than what is being reported as total earnings (24-28% growth), the research house noted.
HSBC raised its 2018-20 net profit forecasts by 1-8% due to the company's revised capex
guidance and its project pipeline. (KL)