[ET Net News Agency, 31 October 2017] Credit Suisse initiated coverage on Anhui Conch
Cement (00914) with an "outperform" rating and HK$42 target price.
It said Conch's cost leadership enables it to maintain higher-than-industry-average
profit margin. Credit Suisse believes production rationale will still be strictly enforced
in the winter of 2017 and onwards. This should keep inventory low and support cement
prices.
It values Conch at the average of 8.5x 2018 EV/EBITDA and 1.8x 2018 P/B, reflecting its
forecast GP per tonne of Rmb87/Rmb88/Rmb88 for 2017-19 - higher than the historical
average of Rmb72/t of the past ten years. (KL)