[ET Net News Agency, 27 August 2018] Nomura lowered its target price for CIMC Enric
Holdings (03899) to HK$9.7 from HK$11.2, and maintained its "buy" rating.
The research house said 1H has seen strong growth of CIMC's gas infrastructure-related
products. Nomura estimated that the revenue of LNG tanks, trailers and tank containers
grew by 55%, 44% and 100% in 1H, more than offsetting weak sales of fuel tanks.
It expects China's strong gas demand (+16% in 1H) and under-investment on gas
infrastructure to drive the demand of gas storage and transportation-related products,
supporting 27% core operating profit growth in next three years.
It said CIMC should be able to deliver 43% net profit growth (key vesting condition of
the management incentive scheme) after taking into account potential M&As.
Nomura revised down its 2018/2019 EPS estimates by 6%/7%, mainly on weak sales of
vehicle tanks. (KL)