Corporation (MMC)(00975) with a "neutral" rating and a target price of HK$4.7.
It believes MMC's margin will continue to expand in 2012-13 at 50% YoY, driven by a
product-mix change, low production cost and strong volume growth. However, earnings growth
will plateau in 2014-15 to 3-7%, when MMC starts to produce thermal coal seams post the
completion of railway lines.
Credit Suisse noted taht MMC's valuations came off to a fair range due to the drop in
coal prices and its lower-than-expected 2012 earnings growth. (KL)