20150612-HSBC-海螺创业（0586）：DOWNGRADE_TO_REDUCE，UNATTRACTIVE_VALUATION-301564

Remain negative on cement：HSBC remains negative on Anhui Conch（914 HK，Reduce，TP HKD25，covered by Wei Sim）on sluggish macro demand and oversupply.We calculate that Anhui Conch represents c70% of our revised valuation for China Conch Venture（CCV）.We raise our earnings forecasts by 10% in 2015 and 6% in 2016 as we expect more waste incineration project wins on the back of the favourable outlook for China’s environmental protection industry.Our earnings revisions are lower than our revenue revisions as our earnings forecasts on the associate income from cement，the biggest part of the bottom line，are unchanged.Our earnings forecasts are 7% below consensus in 2015-16 due to our negative views on cement.