[ET Net News Agency, 16 December 2020] Daiwa raised its target price for CIMC Enric
(03899) to HK$5.3 from HK$4.5 and maintained its "buy" rating.
Enric announced plans for the separate A-share listing of CIMC Safe Tech, a subsidiary
90% owned by Enric. CIMC Safe Tech focuses mainly on the manufacture and sales of
equipment for the transportation of chemicals in the form of liquid, gas and power, as
well as environmental protection equipment for hazardous waste storage. The research house
sees the A-share listing as value-accretive to Enric as it can unlock the conglomerate
discount and provide financing to CIMC Safe Tech for its own growth, while Enric can shift
resources for energy segment development.
It also expects the spin-off to help Enric unlock the conglomerate discount as it can
focus on the development of the energy equipment segment to ride on the development of the
gas sector over the next 1-2 decades and hydrogen power in the future, without the need to
allocate resources for CIMC Safe Tech to explore the area of storage equipment as the
demand for hazardous waste treatment demand grows. (RC)