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HSBC cuts Singamas Container (00716) to HK$1.8
HSBC Global Research lowered its target price
for Singamas Container (00716) to HK$1.8 from HK$2, and maintained its "buy" rating.
  The research house noted prices for container boxes rebounded sharply in 2017 as demand
recovered amidst a supply crunch. In 2018, US-listed box leasing companies, which are key
clients of Singamas, guide for continued strength in demand and prices. Despite the
near-term revival in demand, HSBC expects the medium-term outlook for container
manufacturers to be weak.
  HSBC increases its volume assumptions for 2017-19e to reflect the strong pick-up in
containers at leasing companies during 4Q17 and the positive outlook guided for 2018. At 
the same time, it lowers ASP assumptions to reflect the lower-than-expected prices. It 
also lowers its margin assumptions to reflect slightly higher operating costs due to RMB 
appreciation. Overall, HSBC lowers 2017-19e recurring profit estimates by 6-28%. It
forecasts 2017 reported profit of US$43m compared with company guidance of at least
US$40m. 

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