[ET Net News Agency, 11 April 2018] Morgan Stanley lifted its target price for CSSC
Offshore & Marine Engineering (COMEC)(00317) to HK$17 from HK$16.2, and reiterated its
"overweight" rating.
The research house cut its 2018 earnings forecast by 5% to reflect a delay in defense
vessel new orders in 2017. But it raised its 2019 earnings forecast by 11%. Though 2017
new orders were down 42% YoY, Morgan expects the company's fundamentals to improve in 2018
with the reacceleration of military spending and recovery in the civil shipbuilding
market.
It expects new orders and earnings to expand at 42% and 144% CAGRs in 2017-20 from a low
base. It also expects the company's ROE to recover from 0.8% in 2017 to 9-11% in 2019-20,
supported by significant growth in new orders and cost-reduction initiatives. (KL)