[ET Net News Agency, 23 October 2020] Morgan Stanley lowered its target price for
Honghua Group (00196) to HK$0.24 from HK$0.31 and downgraded its rating to "equal-weight"
from "overweight".
The research house cut its 2020-23 earnings estimates by 35%/9%/13% for Honghua, given
the low oil price will make them face continuous headwinds in 2H.
Morgan said Honghua is the world's second-largest land rig builder with a diversified
product portfolio and market exposure. Its world-leading E-pump could see significant
growth in China given the country's continuous efforts in shale gas development. But E&P
Capex cut amid low oil price is posing headwinds to the company's earnings. (KL)