[ET Net News Agency, 24 May 2018] UOB Kay Hian initiated coverage on China National
Building Material (CNBM)(03323) with a "buy" rating, and a target price of HK$13.4.
The research house said CNBM's financial leverage was extremely high in the past due to
its aggressive capacity expansion via M&As. Net debt to equity ratio has been hovering
above 200% in the past six years.
UOBKH believes the merger with Sinoma would have decreased its net gearing to 149% for
2017 and expects deleveraging to continue given CNBM's reduced capex and positive cash
flow. (KL)