[ET Net News Agency, 10 June 2020] Daiwa Research raised its target price for China
Everbright International (CEI)(00257) to HK$4.5 from HK$4.3 but downgraded its rating to
"hold" from "outperform".
The research house said CEI's share price has risen by 20% from its low on 19 March.
Daiwa remains concerned about its cash flow risk, as it expects CEI to continue with its
asset-heavy model via a robust project ramp-up, which implies heavy capex and rising
gearing and negative FCF.
Furthermore, there is uncertainty over future WTE (waste-to-energy)/biomass tariff
policy despite the NDRC has released a consultation draft in April. Also, existing
projects may still face subsidy collection delays given the large deficit of the RE Fund.
(KL)