[ET Net News Agency, 29 August 2018] Daiwa Research lowered its target price for
AviChina Industry & Technology (02357) to HK$4.8 from HK$5.5, and downgraded its rating to
"hold" from "buy".
The research house expects AviChina's outlook to be stable, but do not see any strong
earnings catalyst in the near term.
AviChina expects a new helicopter model to be launched and order deliveries to improve
in 2H, but Daiwa expects a boost to earnings only in 2019 as it is likely to be launched
in late 2018. The potential injection of R&D institutes may take longer, it added.
Daiwa believes that industry consolidation would continue but gradually in the coming
years, and the scale of overseas M&A would be small. It revised down its 2018-20 EPS
forecasts by 11-12% after taking into account the weaker 1H results. (KL)