[ET Net News Agency, 24 March 2020] UOB Kay Hian raised its target price for Anhui
Conch Cement (00914) to HK$66.9 from HK$65.1 and maintained its "buy" rating.
The research house said Conch posted inline 2019 net profit of Rmb33.6bn. This is its
best annual earnings, thanks to rising cement ASP (+2.6%) and a resilient core margin
(47.1%). Net cash rose further to Rmb60b (+120%) on a record-high net operating cash
inflow.
However, dividend payment of Rmb2/share (payout ratio: 31%)was no surprise. UOBKH raised
its net profit forecasts by 8% and 7% for 2020 and 2021. It forecast blended cement ASP
(self-produced) to reduce 2% to Rmb316/tonne (previous estimate: Rmb310/tonne), a 2%
reduction in sales volumes (unchanged) in 2020, and unit cost per tonne estimates to rise
1.3% (previous estimate: up 3%) on lower coal cost in 2020. (KL)