[ET Net News Agency, 7 January 2020] Morgan Stanley lowered its target price for
Sinopec Shanghai Petrochemical (00338) to HK$2.4 from HK$2.74 and maintained its
"equal-weight" rating.
The research house said Sinopec Shanghai's earnings in 1H 2019 are a good example of the
chemical downturn in 1H. The resin and plastics segment saw a 47% earnings drop while the
intermediate petrochemical segment had a 66% earnings decline.
Morgan trimmed its 2019-21 earnings estimates by 4-11%. It said the company is a key
beneficiary of product oil quality upgrade in China. But the chemical segment faces higher
downward pressure from new capacity addition. Morgan sees limited upside catalysts for the
stock. (KL)