[ET Net News Agency, 25 October 2019] Credit Suisse raised its target price for Sinopec
Shanghai Petrochemical (SPC)(00338) to HK$2.3 from HK$2 and upgraded its rating to
"neutral" from "underperform".
The research house said Sinopec SPC's 3Q headline net profit came in at Rmb535mn (+2%
QoQ), better than Credit Suisse's below-consensus estimates and tracking 73% of consensus'
FY2019. Credit Suisse believes Sinopec SPC's earnings have troughed, hence the rating
upgrade.
Credit Suisse expects a gradual, albeit small, uptick in quarterly earnings from the
lows in 2Q. That said, the recent spike in freight costs due to US sanctions may put a cap
on margin recovery in 4Q. Also, the ramp-up of new capacities in 2020-21 means that the
industry needs to look for a new balancing point.
Credit Suisse lifted its 2019-21 EPS forecasts by 12-43%. (KL)
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00338 SHANGHAI PECHEM
Nominal 
1.080 +0.040 (+3.846%) Others
25/10/2019 10:47
{I-bank focus}CS ups Shanghai Petchem (00338) to HK$2.3
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