Beijing’s top cement firm suggests caution as stocks soar thanks to Xi’s plans for China’s new futuristic ‘dream town’
Surprise announcement of blueprint for Xiongan New Area in Hebei sparks rush for related shares
Beijing’s top cement maker has warned investors to remain “rational” after its shares skyrocketed a whopping 49 per cent in two days after the Chinese government announced over the weekend to build a special economic zone 100 km from the national capital.
“But we also want to remind investors of risk, and that the new economic zone’s positive impact on our business operation will not kick in immediately.”
The company’s shares dipped more than 7 per cent on Thursday, after Morgan Stanley slashed its target price by 33 per cent, citing concerns over its high valuation and subdued earnings in property business. But it was also given a series of target price upgrades by other investment banks.
Credit Suisse, for example, predicted BBMG’s cement sales to deliver a 106 per cent annual rise this year on back of President Xi Jinping and the State Council’s decision to pick the hinterland as a new economic zone.
The cement maker logged a 33 per cent net profit jump last year to 2.7 billion yuan, aided by a business overhaul.
