Target already met! Be careful of the short term retracement of its shr price cause it has gone up too sharply! It took only 5 days to reach HKD17.78 after breaking HKD14.00. Handsome 27% returns within 5 days.
HONG KONG (XFN-ASIA) - Deutsche Bank initiated coverage of China Communications Construction (CCCC) with a ""buy"" recommendation and a price target of 17.80 hkd, saying the stock will benefit from massive demand for infrastructure in China and the Asian region. ""Already a dominant player in China, its experience and cost advantage should enable it to break into overseas markets,"" it said. In a report to clients, Deutsche Bank said ""high operating leverage, cost-cutting and business shift should see margin expanding, resulting in another six years of structural growth at 27 pct compounded annual growth rate."" It said China will spend an estimated 5.3 trln yuan to build transportation infrastructure from 2006 to 2010, accounting for 75 pct of overall demand in Asia. ""Being the dominant contractor in China, China Communications stands to benefit. Its cost advantage will also enable it to achieve its target of growing overseas contracting backlog from 10 pct now to 25 pct,"" it added. It said the company's earnings before interest tax depreciation and amortization (EBITDA) margin has been rising consistently. Its 2006 margin stood at 8.2 pct, up from 7.2 pct in 2004. ""We project this trend to continue, reaching 9 pct by 2009,"" the investment bank said. At the close of the morning session, China Communications was up 0.40 hkd or 2.30 pct at 17.78.
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