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18-11-2014, 10:36 AM
For those interested and vested.
(not vested)
Sino Grandness kept at ‘buy’ with 95 cents price target by UOB-KayHian
SINGAPORE (Nov 18): UOB-KayHian is maintaining its “buy” call for Sino Grandness Food with price target of 95 cents.
In a Nov 17 report, Brandon Ng Chenhao said Sino Grandness Food's 9M14 earnings came in above expectations and have already formed 90% of the house’s full-year estimate and the stock has also declined considerably.
In 9M14, Sino Grandness reported a net profit of RMB448.3 million ($95 million), up 31.2% from a year ago, driven by stronger revenue and improved gross profit margins.
Revenue grew 35.3% y-o-y to RMB2.3 billion as sales of its Garden Fresh bottled juices continued to register strong growth of 46.9% to RMB1.5 billion while sales of canned products also grew 18.3% y-o-y to RMB823.9 million.
9M14 gross profit increased 39.4% y-o-y to RMB908.2 million with gross margin improving slightly to 39.2% from 38.1% in 9M13 due to stronger contribution from the higher margin beverage segment.
Although the 9M14 results already formed 90% of UOB-KayHian’s full-year estimate, the house is only adjusting its forecast marginally, as the fourth quarter is seasonally a weaker quarter and the company will have to charge an additional interest payment for the partial convertible bond redemption in October.
Sino Grandness has also made several positive announcements in the quarter, said Ng. These announcements include securing a new distributor to sell Garden Fresh products in Hong Kong’s wellcome supermarket chains and eventually 7-Eleven stores.
The rest of the RMB80.5 million convertible bondholders have also signed the documentations to extend the maturity date to 30 Jun 15 while the company has also secured about RMB300 million worth of indicative orders from the recently concluded Chongqing tradeshow.
Lastly, Sino Grandness has lodged the offer document with the SGX on the recent placement to the Thai investment conglomerates, Thoresen Thai Agencies (TTA) and PM Group. Although Sino Grandness not give a definitive date when it will obtain the approval from SGX, UOB-Kay Hian estimates that the deal will be completed in 4-8 weeks’ time.
Sino Grandness’ share price has declined considerably despite the several positive developments and CEO Huang also bought 1.72 million shares at an average price of 50 cents.
However, Ng said risk averse investors should only accumulate the shares after the Garden Fresh listing becomes more apparent or at least the placement deal between Sino Grandness and PM Group is completed.
By then, Sino Grandness’s balance sheet will be stronger and the company can formulate an official policy of paying 10% of its net profits as dividends, providing investors a yield of 3.3%.
Sino Grandness closed 3.2% lower yesterday at 46 cents.
http://www.theedgemarkets.com/sg/article...ob-kayhian
(not vested)
Sino Grandness kept at ‘buy’ with 95 cents price target by UOB-KayHian
SINGAPORE (Nov 18): UOB-KayHian is maintaining its “buy” call for Sino Grandness Food with price target of 95 cents.
In a Nov 17 report, Brandon Ng Chenhao said Sino Grandness Food's 9M14 earnings came in above expectations and have already formed 90% of the house’s full-year estimate and the stock has also declined considerably.
In 9M14, Sino Grandness reported a net profit of RMB448.3 million ($95 million), up 31.2% from a year ago, driven by stronger revenue and improved gross profit margins.
Revenue grew 35.3% y-o-y to RMB2.3 billion as sales of its Garden Fresh bottled juices continued to register strong growth of 46.9% to RMB1.5 billion while sales of canned products also grew 18.3% y-o-y to RMB823.9 million.
9M14 gross profit increased 39.4% y-o-y to RMB908.2 million with gross margin improving slightly to 39.2% from 38.1% in 9M13 due to stronger contribution from the higher margin beverage segment.
Although the 9M14 results already formed 90% of UOB-KayHian’s full-year estimate, the house is only adjusting its forecast marginally, as the fourth quarter is seasonally a weaker quarter and the company will have to charge an additional interest payment for the partial convertible bond redemption in October.
Sino Grandness has also made several positive announcements in the quarter, said Ng. These announcements include securing a new distributor to sell Garden Fresh products in Hong Kong’s wellcome supermarket chains and eventually 7-Eleven stores.
The rest of the RMB80.5 million convertible bondholders have also signed the documentations to extend the maturity date to 30 Jun 15 while the company has also secured about RMB300 million worth of indicative orders from the recently concluded Chongqing tradeshow.
Lastly, Sino Grandness has lodged the offer document with the SGX on the recent placement to the Thai investment conglomerates, Thoresen Thai Agencies (TTA) and PM Group. Although Sino Grandness not give a definitive date when it will obtain the approval from SGX, UOB-Kay Hian estimates that the deal will be completed in 4-8 weeks’ time.
Sino Grandness’ share price has declined considerably despite the several positive developments and CEO Huang also bought 1.72 million shares at an average price of 50 cents.
However, Ng said risk averse investors should only accumulate the shares after the Garden Fresh listing becomes more apparent or at least the placement deal between Sino Grandness and PM Group is completed.
By then, Sino Grandness’s balance sheet will be stronger and the company can formulate an official policy of paying 10% of its net profits as dividends, providing investors a yield of 3.3%.
Sino Grandness closed 3.2% lower yesterday at 46 cents.
http://www.theedgemarkets.com/sg/article...ob-kayhian
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