Citibank: Downgrades China Building Materials (03323.HK) target price to 4.2 Hong Kong dollars, rating "Buy"

Zhitong Finance APP learned that Citigroup released a research report stating that after China Building Materials (03323.HK) announced first-quarter performance and provided the latest guidance from management, they updated their valuation model. The bank introduced forecasts for 2027 and raised profit forecasts for the next two years by 8% and 10% respectively to reflect the increase in gross profit forecast for cement and clinker units. The bank reduced the target price for China Building Materials from 5.4 Hong Kong dollars to 4.2 Hong Kong dollars, equivalent to a forecast price-earnings ratio of 7.8 times (on par with the average of H-share industry peers), to reflect the current industry and market environment, and giving a "buy" rating. Due to more disciplined supply and declining coal costs, profit margins are expected to expand this year, partially offset by lower sales volume forecasts.