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HSBC lifts CNBM (03323) to HK$9; "hold"

  HSBC Global Research lifted its target price for
CNBM (03323) to HK$9 from HK$8.5, and reiterated its "hold" rating.
  The research house cited management at the analyst briefing expecting volumes to be
slightly lower in 1Q 2018 due to poor weather conditions in January-February, and the NPC
meeting in March. It expects GP/t to be around RMB100/t in 1Q.
  Regarding the merger deal with Sinoma (01893), the company expects the deal to be
completed by May. HSBC believes synergy in cement will come from higher market 
concentration and joint procurement of raw materials and power. There could also be cost 
savings in the engineering and new material businesses, particularly in the fiberglass 
segment. 
  HSBC has not incorporated Sinoma in our estimate at this stage, and it increased its 
FY2018-19 GP/t assumptions by around Rmb9/t. As a result, HSBc lifted its earnings 
estimates by 8%/7% for 2018/19. 

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