Excerpts from latest analyst reports…..


CIMB says CHINA ENVIRONMENT’s fair value is possibly 32 cents

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China Environment's Fujian Province-based facilities. Photo: Company


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China Environment CFO Mr. Chiar Choon Teck.
Photo: Company

Potential re-rating of valuations with potential dual listing? The Company has recently announced plans to seek a dual primary listing on the main board of the Stock Exchange of Hong Kong (SEHK) through a public offering of new shares in a bid to widen its investor base and improve trading liquidity.

Though we concede that not all dual listed stocks achieve superior valuations on secondary listing, we believe that this potential is worth highlighting. CENV currently trades at 12.3x historical P/E, while its peers in Hong Kong trade at an average of 17.3x.

If the stock could successfully list and achieve such valuations on SEHK, its value may rise to as high as S$0.30 (+40% upside).

But even before considering its re-rating potential, we think its current valuation is undemanding. Based on its annualised FY10 earnings (2.9 scts), China Environment (CENV) trades at 7.4x P/E.

Recently listed peer, Leader Environment (LET), has a smaller market cap and earnings base (9M10 net profit / EPS: RMB31.8m / EPS: 2.3scts).

However, LET is trading at 11x of its annualised FY10 earnings. Thus, we think that CENV may not be fairly valued by the market, and that 11x FY10 P/E may be a more accurate reflection; this implies a possible fair value of S$0.32 (49% upside) for the stock.

Recent story: CHINA ENVIRONMENT Seeks dual listing in Hong Kong To Boost Trade, Funds





DnBNor says ‘buy’ JAYA HOLDINGS, ‘vessel price trend in focus’

Analysts: Kay Lim & Thor Andre Lunder

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Jaya trades at below 70 cents while its NAV is $1.08

Volatile earnings are still expected due to Jaya's build to sell business model, which is extremely cyclical and geared towards the offshore cycle.

In our view, Jaya is the yard to own, being the best proxy in an investment cycle that is turning up, as the yard can enjoy the upside from higher vessel prices.

The shares are priced at an attractive discount of 0.63x to our NAV. We reiterate our BUY recommendation.

Valuation: We value Jaya at an NAV of SGD1.08/share. FY 2011e EV/EBITDA of 6.7x and P/E of 7.0x.


Recent story: BROADWAY, JAYA HOLDINGS : What analysts now say....







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In 2006, F J Benjamin added Gap to its stable of brands and became Gap Inc.’s first ever franchisee. Photo: FJ Benjamin website

DMG has buy call on FJ BENJAMIN after 2Q11 net profit more than doubles

Analysts: Melissa Yeap & Terence Wong, CFA

The news: FJ Benjamin Holdings, Singapore’s leading fashion and lifestyle group announced higher earnings for its 2Q11 on the back of strong festive spending and record tourist arrivals across the region.

Net profit more than doubled to S$4m from S$1.7m in 2Q10 while operating profit surged to S$5.1m from S$1.0m in the previous corresponding quarter.

Turnover rose 18% to S$93.1m in 2Q11 from S$79.0m in 2Q10 with improvements seen across major markets.

Our thoughts: With rising disposable income reflected in strong consumer spending across its major markets, we expect to see FJ Benjamin registering further strong growth in its subsequent quarterly earnings.

Its Marina Bay Sands stores have seen an improvement in sales. According to management, three quarters of its customers are tourists. This proves that the high tourist arrivals would further enhance earnings. In general, the Singapore and Indonesia markets are doing well, while Malaysia is still challenging.

We have a BUY call with TP of S$0.52.


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