Bank of America Merrill Lynch reported that it downgraded China Chemical Fertilizer (00297-HK) from buying to outperforming the big market, and its target price fell sharply from HK $3 to HK $1.80.
The bank cut its 2011-13 earnings forecast by 15 per cent a year, with limited growth in demand for potash, putting pressure on sales and gross margins. In addition, reflecting the impact of weak demand on prices and sales, the bank reduced potash sales growth in 2012 from 10 per cent to 3 per cent.
Sinochem rose 0.9 per cent yesterday to HK $2.24.