[ET Net News Agency, 3 March 2020] Daiwa Research lowered its target price for NWS
Holdings (00659) to HK$15.6 from HK$19.3 on earnings revision and maintained its "buy"
rating.
The research house hosted a post-results NDR for NWS on 2 March to discuss its 1H FY20
results and near-term outlook. Despite near-term earnings pressure, Daiwa sees NWS as a
defensive dividend player backed by its committed progressive dividend policy.
Despite a near-term impact on the attributable operating profit and operating cash flow
of toll roads due to China's waiver of toll road tariffs effective from 17 February (till
30 June preliminarily), management expects compensation to be announced such as the
extension of road concession periods, or favorable bank loan policies.
Management maintained its fleet size growth target of 10% and does not see substantial
impact on the segment due to the Covid-19 outbreak which pressures airlines' cash flow.
Daiwa cut its 2020-22 EPS forecasts by 16-29% after factoring in the toll-road fee
cancellation policy and higher financial cost assumptions due to increased net debt. (KL)