[ET Net News Agency, 9 July 2019] Citi Research lifted its target price for China
National Building Material (CNBM)(03323) to HK$7.8 from HK$7.6 and maintained its
"neutral" rating.
The research house expects CNBM's 2Q net profit to rise by 12% thanks to strong sales
volume and ASP in the quarter. Citi also expects the company to gradually pay down its
debt. However, it remains concerned on the potential asset impairment in 2019 and 2020
(mainly from cement capacity swap). A catalyst for the stock is the potential
restructuring of its business lines after the merger with Sinoma.
Citi raised its earnings forecast by 17-20% to factor in higher cement and clinker sales
volume and ASP assumptions, and higher concrete sales volume and ASP assumptions. (KL)