[ET Net News Agency, 13 May 2020] Morgan Stanley raised its target price for Anhui
Conch Cement (00914) to HK$70 from HK$67.1 and maintained its "overweight" rating.
The research house believes the valuation recovery of the China cement industry since
2019 will continue in 2H 2020 given (1) stronger margins and earnings outlook in 2H, (2)
companies' FCF (free cash flow) should improve starting from 2Q, underpinning sustainable
high dividend payouts and thus yields, and (3) balance sheets continue to strengthen.
Morgan thinks sentiment towards Conch will improve further once the tight clinker
supply/demand triggered by longer-than-expected maintenance in 3Q starts playing out. It
raised its 2020 full-year sales volume to reflect strong shipments since 2Q. But Morgan
cut overseas sales volume due to the Covid-19 impact. (KL)