[ET Net News Agency, 20 April 2018] Morgan Stanley cut its target price for China
Communications Construction Company (CCCC)(01800) to HK$10.7 from HK$14, and reiterated
its "overweight" rating.
The research house forecast CCCC's net profit to increase at CAGR of 11% in 2018-20,
with faster execution of overseas projects. It expects ROE to improve to 13% in 2018 and
stay stable. It sees current valuation at historical low 5x P/E and 15% discount to its
H-share peers as compelling.
Morgan raised its 2018-20 earnings estimates for CCCC by 4%, 4% and 9%, respectively.
It expects CCCC's revenue to increase 8% YoY, below Mogan's full-year estimate of 12%
YoY growth, due to the influence of environmental controls in North China, while it
projected net profit to increase 11% YoY, thanks to higher revenue contribution from
overseas and PPP construction projects. (KL)