[ET Net News Agency, 29 August 2019] Goldman Sachs raised its target price for Hongqiao
Group (01378) to HK$5.7 from HK$5.5 and maintained its "neutral" rating.
The research house said Hongqiao's 1H recurring (excluding a one-off including the
impairment of a power plant) net profit of Rmb2.48bn was higher than Goldman's
expectation, due to a higher spread for the aluminum industry and also Hongqiao's higher
realized ASP for aluminum products, partly offset by lower sales volume and higher SG&A.
Goldman revised up its net profit forecast by 41.2% for 2019, 7.6% for 2020, and 4.9%
for 2021 to reflect higher Al spread for the China aluminum industry for 2019 (from
Rmb1,400/t to Rmb1,750/t) and better price premiums from the higher fabrication
contribution for 2020-21. (KL)