[ET Net News Agency, 24 August 2020] Goldman Sachs raised its target price for Anhui
Conch Cement (00914) to HK$58.5 from HK$55 and maintained its "neutral" rating.
The research house said Conch's 1H result was 18% higher than Goldman's expectation,
driven mostly by lower-than-expected SG&A expenses in the period.
Despite the deceleration of demand growth in recent months, Goldman expects cement
demand to re-accelerate in 2H, driven by infrastructure and property construction
activities. It expects unit GP (gross profit) of Conch to sustain at an average Rmb160/t
in 2020 and Rmb160/t in 2021.
Goldman revised up its earnings by 19% for 2020, 11% for 2021, and 6% for 2022, to
reflect the lower SG&A cost and better-than-expected unit GP in 1H, yet maintained most
assumptions in 2H and kept 2021-22 unchanged. (KL)