We raise our 12-month target price (TP) for DANGCEM to N349.76 (vs N277.02 previously). Our new TP primarily reflects a revision to our 5-year mean revenue growth forecast to an average of 10.2% (vs 5.1% earlier and 18.3% over the last 5 years). We see scope for a 1-year total return of 23.3% (comprising a 16.6% in capital appreciation and 6.7% in dividend yield). Therefore, we upgrade our recommendation on the stock to a BUY.

As mentioned in our previous report, prices remain the biggest single driver of DANGCEM's FY'22 earnings. This position is corroborated by the 36.4% YoY growth in domestic rev/tonne, which masked the 1.7% volume contraction in Q1'22 and cascaded to 34.3% sales growth in Nigeria. We expect prices to remain relatively elevated in the interim, given the heightened level of demand and the rise in energy costs such as diesel and gas prices.