[ET Net News Agency, 30 April 2018] Daiwa Research lifted its target price for CIMC
Enric (03899) to HK$10.5 from HK$10, and reiterated its "buy" rating.
The research house said the NDRC announced an opinion on mandatory gas storage requiring
natural gas distributors to establish storage capacity of not less than 5% of their annual
procurement volume by end-2020.
Daiwa believes city-gas operators will focus on purchasing small-sized LNG tanks. After
securing resources (eg, land) from local governments, operators are likely to procure
large-sized LNG storage tanks (>1k m3) due to the lower unit storage cost. As the entry
barriers to the production of large-sized LNG tanks are higher, their gross margins (GPM)
are generally higher.
Given Enric's 50% market share in the LNG equipment market in China, Daiwa thinks it is
likely to see CNY6bn/CNY330m in total sales/net profit over 2019-21 arising from the
mandatory storage policy. (KL)
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03899 CIMC ENRIC
Nominal 
7.640 +0.010 (+0.131%) Others
30/04/2018 10:12
[I-bank focus]Daiwa lifts CIMC Enric (03899) to HK$10.5
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