UOB Kay Hian analyst Clement Ho has initiated coverage on specialty chemical producer China Sunsine Chemical Holdings with a “sell” recommendation and a target price of 31 cents.

The recommendation comes as selling prices of rubber accelerators, the main earnings driver for the company, remain low due to depressed prices of raw materials and industrial overcapacity, Ho writes in a report dated September 15.

“Given that the industry consolidation is still on-going and headwinds remain on selling prices of rubber accelerators, we believe valuation for Sunsine would stay depressed,” says Ho.

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