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2009-5-8 10:50:00 a.m. HKT, XFNA
DJ MARKET TALK: Goldman Upgrades Hidili Indus To Buy From Neutral
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| 1041 [Dow Jones] STOCK CALL: Goldman Sachs upgrades Hidili Industry (1393.HK) to Buy from Neutral on view stock provides strong leverage to improving coking coal fundamentals as house forecasts 2010 volume to rise 45% on-year, supporting 87% on-year earnings growth. Houses raises target to HK$5.50 from HK$2.30, based on 2010 P/E of 10X, average of global coking coal peers. But, lowers 2009-11 earnings estimates by 17%-50% after factoring in coking coal ASP down 30% on-year, flat unit cost in 2009, more conservative than previous estimates; 2010-2011 estimates lowered due to lower base. Notes risks include unexpected large easing of small mine supply in Shanxi or extended macro demand weakness. Stock +4.2% at HK$4.45; HSI down 0.7%.(YWM) Contact us in Hong Kong. 852 2802 7002; MarketTalk@dowjones.com
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(Delayed by 1 hour)
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