Merrill Lynch upgraded the rating of COUNTRY GARDEN (02007.HK) +0.300 (+10.490%) Short selling $23.27M; Ratio 4.445% to Buy, with a target price of $3.9 in order to reflect the PBOC's interest rate cut and attractive share price. The share of Country Garden is trading at 4.6x/ 4.4x of 2014/15 P/E and 0.7x of P/BV.
CLSA lowers Beijing Ent Water (00371) to HK$6 CLSA cut its target price for Beijing Enterprises Water (BEW)(00371) by 8% to HK$6, and reiterated its "buy" rating. The research house said BEW's share price has dropped 14% in the last two trading days. First, the 2017 earnings results are below expectations. Second, management is guiding for 20-25% net profit growth for 2018, versus 30% in the past few years. Management now has a cautious approach to water PPP (public-private partnership) projects, which is not necessarily bad. CLSA cut its 2018-19 earnings forecasts by 19%. At the current level, it believes many of the negatives are already priced-in.
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