Huatai Securities raised the target price of CONCH VENTURE to 12.12 yuan, maintaining a "Buy" rating

Huatai Securities published a research report indicating that CONCH VENTURE (00586.HK) saw a 1.6% year-on-year decline in revenue in the first half of the year, while net profit increased by 9.3%. Excluding the impact of the share of profits from the associated company Conch Group, the core net profit from the waste-to-energy business was RMB 450 million, a year-on-year decrease of 6%.

The firm is optimistic about CONCH VENTURE's continued reduction in capital expenditure, enhancement of dividend levels, as well as increasing the proportion of operational revenue and improving profit quality. It is expected that under the backdrop of reducing competition, the company's cement investment returns are likely to stabilize and improve. The "Buy" rating is maintained, with the target price raised by 16.6% to HKD 12.12, while maintaining the company's net profit forecasts for 2025 to 2027 at RMB 2.48 billion, RMB 2.76 billion, and RMB 3.03 billion, respectively. The rating remains "Buy."