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<Research>UBS: ZOOMLION Most Negatively Impacted by Mideast Conflict; CHINA CSSC Benefits
Recommend 2 Positive 2 Negative 6 |
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UBS released a research report believing that, if the Middle East conflict persists, the direct negative impact on China's industrial sector will be relatively limited, with most companies having less than 10% of their revenue from the region. Although the direct impact of the conflict is mainly financial (e.g., revenue changes and higher transportation costs), the indirect effects- often overlooked by investors- require close attention, as the conflict may affect the outlook for product/industry demand. The rise in oil and gas prices has minimal impact on the industrial companies covered by the broker, but the resulting increase in coal prices could raise electricity prices, slightly increasing production costs and potentially leading to changes in product mix (higher demand for electrified products). UBS considered ZOOMLION (01157.HK) to be most negatively impacted due to its relatively high exposure to the Middle East and low mining exposure, with rating at Neutral and a target price of $7.8, while leading shipbuilder CHINA CSSC (600150.SH) stands out as potentially seeing a positive impact, in the broker's view, with rating at Buy and a target price of RMB45.8. AASTOCKS Financial News Website: www.aastocks.com |
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