Key Takeaways:
- Goldman Sachs upgrades China XLX Fertiliser to "Buy" from "Neutral"
- Price target lifted 65% to HK$14, implying 11% upside from last close
- Upgrade reflects higher forecasts for urea prices and coal chemical profits
返回
China XLX Fertiliser Target Raised 65% to HK$14 by Goldman Sachs
Goldman Sachs upgraded China XLX Fertiliser (01866.HK) to “Buy” and raised its price target by 65% to HK$14, citing an improved outlook for urea prices and coal chemical margins.
"We are raising our 2026-2028 earnings forecasts on higher urea price assumptions," Goldman Sachs said in a note released Tuesday.
The bank lifted its price target from HK$8.50 to HK$14.00. The new target implies an 11% upside from the stock's last closing price of HK$12.61. Goldman Sachs increased its net profit forecasts for the fertiliser company for 2026, 2027, and 2028 by 43%, 19%, and 16%, respectively.
The upgrade comes after the company boosted its dividend payout ratio to 42% in 2025 from 22% a year earlier. The stock has been on a strong run, trading near its 52-week high of HK$12.98.
The positive revision from Goldman Sachs is based on expectations of stronger profitability from urea and coal chemicals, which is projected to offset higher costs for raw materials like coal. The company's stock is currently trading at a price-to-earnings ratio of 14.5 times last year's earnings.
The raised forecast suggests management expects robust demand and pricing power to continue. Investors will watch for continued margin expansion from the company's new capacity to see if the rerating is sustained.
This article is for informational purposes only and does not constitute investment advice.
