[ET Net News Agency, 4 September 2019] Daiwa Research lowered its target price for
China Communications Construction (CCC)(01800) to HK$7.2 from HK$9.3 but upgraded its
rating to "buy" from "outperform".
Despite the results miss, the research house believes the stock's negatives are mostly
reflected in its distressed valuation. It believes CCC's disposal of its non-core business
will benefit its profitability and gearings in the longer term.
Daiwa expects more follow-up policies to be released in the coming months, which should
ease the tight liquidity of local governments and thus boost the implementation of
infrastructure projects. It lowered its 2019-20 core EPS forecasts by 11% to factor in the
weaker 1H results and the lower margin assumptions. (KL)