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2009-6-15 01:10:00 p.m. HKT, XFNA
DJ MARKET TALK: Tianjin Port Deal Fully Priced In, Take Profit-CS
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| 1218 [Dow Jones] STOCK CALL: Credit Suisse tips taking profit on Tianjin Port Development (3382.HK) after stock surged by 30% over past few sessions on plan to acquire 56.81% of TPH (600717.SH) from Tianjin Port Group. Downgrades stock to Underweight from Neutral. "While we still remain our positive view on the deal, with post-acquisition 2009-10E P/E rising to 32X and 27X, we think the acquisition story is fully priced in." Adds, market "too excited" about TPH's bulk cargo business, ignoring both near-term, long-term risks; near-term house expects strong iron-ore import momentum to likely weaken rest of year; also views competition from nearby large bulk cargo port, Caofeidian, to be key iron-ore, coal growth risk. Increases target price to HK$2.47 from HK$1.98 on improved port volume outlook, lower discount rate; raises 2009-10E earnings forecasts by 4.6%, 6.8%, but cuts FY11 EPS forecast by 34%. Shares down 8.4% at HK$3.37; HSI down 1.6%. (LES) Contact us in Hong Kong. 852 2802 7002; MarketTalk@dowjones.com
(Delayed by 1 hour)
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