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2009-2-23 11:14:00 a.m. HKT, XFNA
DJ MARKET TALK: Macquarie Cuts Zhuzhou CSR Target To HK$8.20
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| 1100 [Dow Jones] STOCK CALL: Macquarie cuts Zhuzhou CSR Times (3898.HK) target to HK$8.20 from HK$10.95; warns gross margin may fall on change of product mix, transfer pricing issue with parent. Tips gross margin to fall to 37% this year (vs 38% in 2008), to 36.3% in 2010. But keeps Outperform call as says order flow will likely stay strong at least until 2010 on higher local demand, especially in subway segment. Also, stock's valuation is more reasonable than peers, new target implies 15.8X 2009 PER, about 10% discount to parent China South Locomotive (1766.HK). Zhuzhou CSR shares down 0.6% at HK$7.11, China South Loco +0.9% at HK$3.39. (ARP) Contact us in Hong Kong. 852 2802 7002; MarketTalk@dowjones.com
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(Delayed by 1 hour)
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