06-12-2012, 09:22 PM
Any view of this counter, which deals with high end of the power cable business?
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Hu An Cable wins $18.2m contract from State Grid Corporation of China
The new order, signed under the group’s wholly-owned subsidiary, Wuxi Hu An Wire And Cable Co., is to supply 325km of low-voltage power cables to various municipal projects in Shanghai, China. Around 80% of the deliveries are expected to take place in 2012 and the balance in 2013.
The new order comes after the RMB105.6 million contract signed in August 2012 with China’s top five power generation company China Power Investment Corporation, and the RMB103.1 million contract signed in July 2012 with Hubei Province Electric Power Company.
Phillip Securities cut its target price for Hu An Cable Holdings to $0.190 from $0.275 and kept its ’buy’ rating, citing smaller expected revenue and lower copper prices.
Shares of Hu An were unchanged at $0.134. They have gained 18.6% since the start of the year, compared with the FT ST Industrials Index’s 16.6% rise.
Hu An had said its net profit for the first half of the year fell 37.8% from a year ago to 38.7 million yuan.
The company underperformed most of its peers in terms of revenue growth and net profit margin, Phillip said in a report.
The brokerage cut its forecast revenue for the second half of the year and first quarter of 2013 by 25%, due to lower-than-expected volumes for its cable and wire business in the second quarter.
Phillip Securities Research in a July 1 research report says: "Hu An Cable’s comparable performance means that it is unlikely to be another Chinese fraud, which usually outperforms peers by a big margin.
"High raw material prices and labour rates, together with a melee of competition at the low-end of market, reduced volumes of peer group. But moving to the high-end helps. Wire & cable industry leaders are confident their industry will outgrow China’s GDP growth for the next 10 years.
"We added quarterly forecasts for 2011 and extended annual forecasts to 2020. We estimate Hu An Cable’s present value (PV) to be $801 million. Its current market cap is only $250 million. However, as we understand the performance of this peer group, we only expect it to trade to 55% discount to PV. This means an immediate target price of 39 cents. MAINTAIN BUY."
***********
Hu An Cable wins $18.2m contract from State Grid Corporation of China
The new order, signed under the group’s wholly-owned subsidiary, Wuxi Hu An Wire And Cable Co., is to supply 325km of low-voltage power cables to various municipal projects in Shanghai, China. Around 80% of the deliveries are expected to take place in 2012 and the balance in 2013.
The new order comes after the RMB105.6 million contract signed in August 2012 with China’s top five power generation company China Power Investment Corporation, and the RMB103.1 million contract signed in July 2012 with Hubei Province Electric Power Company.
Phillip Securities cut its target price for Hu An Cable Holdings to $0.190 from $0.275 and kept its ’buy’ rating, citing smaller expected revenue and lower copper prices.
Shares of Hu An were unchanged at $0.134. They have gained 18.6% since the start of the year, compared with the FT ST Industrials Index’s 16.6% rise.
Hu An had said its net profit for the first half of the year fell 37.8% from a year ago to 38.7 million yuan.
The company underperformed most of its peers in terms of revenue growth and net profit margin, Phillip said in a report.
The brokerage cut its forecast revenue for the second half of the year and first quarter of 2013 by 25%, due to lower-than-expected volumes for its cable and wire business in the second quarter.
Phillip Securities Research in a July 1 research report says: "Hu An Cable’s comparable performance means that it is unlikely to be another Chinese fraud, which usually outperforms peers by a big margin.
"High raw material prices and labour rates, together with a melee of competition at the low-end of market, reduced volumes of peer group. But moving to the high-end helps. Wire & cable industry leaders are confident their industry will outgrow China’s GDP growth for the next 10 years.
"We added quarterly forecasts for 2011 and extended annual forecasts to 2020. We estimate Hu An Cable’s present value (PV) to be $801 million. Its current market cap is only $250 million. However, as we understand the performance of this peer group, we only expect it to trade to 55% discount to PV. This means an immediate target price of 39 cents. MAINTAIN BUY."