Deutsche Bank lifted its target price for West China Cement (WCC)(02233) to HK$1.7 from HK$1.55, and maintained its "outperform" rating.
The research house said investors' perception that WCC is merely a Conch (00914) M&A proxy is about to change. During the NDR, management was optimistic about its supply-demand outlook, new revenue streams, potential of a strong dividend and imminent credit rating upgrades, which all lead DB to conclude that WCC will be the highest earnings growth cement company in 2017 and 2018.
DB said WCC is off to a strong start in 3Q, and taking into consideration explosive infrastructure starts and aggregates' contribution, the research house raises its FY2017/18 earnings by 31%/53%.
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