Anhui Conch's target raised to 120 hkd in Hong Kong - Credit
Credit Suisse said it is raising its target price on Anhui Conch Cement Co's Hong Kong shares to 120 hkd per share from 60 hkd due to the continued rise of cement prices.
It also maintained its ""outperform"" recommendation on the stock.
The brokerage noted that the China cement industry remains its favored sector.
""We think the industry may see an under-supplied cement market in 2008-09 with (the) potential closure of 140 mln tons of small kilns, or up to 12 pct of the industry supply in 2008,"" it said.
""Based on the new project pipelines, we estimate that 90-100 mln tons -- or 8 pct of (the) current market -- will be coming on line in the next four quarters. This should be offset by the demand growth estimate of 8-10 pct,"" it said, adding that year to date demand growth stands at 13 pct.
It raised its cement price growth estimate in 2008 to 13 pct from 10 pct, and to 10 pct from 5 pct in 2009, to reflect the positive outlook of the industry in 2008-09.
At 11.35 am, Anhui Conch rose 0.7 hkd or 0.85 pct at 82.95 after a 20.96 pct gain yesterday.