[ET Net News Agency, 1 February 2018] Citi Research lifted its target price for Sinopec
Engineering (SEG)(02386) to HK$10 from HK$8.64, and reiterated its "buy" rating given the
much improved fundamentals.
SEG guided FY2017 earnings to decline 25%-35% YoY to RMB1.08-1.25bn. Management
indicated the Fx loss in FY2017 was RMB660mn, versus RMB623mn Fx gain in FY2016. Excluding
the FX impact, SEG would actually deliver 30-44% YoY earnings growth as of FY2017 to
RMB1.60bn-1.76bn, said the research house.
Citi said SEG is the late-cycle beneficiary of rising oil price. Its recent stock
incentive plan would secure growth through 2020. Citi sees limited downside given the
HK$6.9 cash per share. (KL)