Excerpts from latest analyst reports…..
JP Morgan says 'overweight' YANGZIJIANG with a $1.80 target price
JP Morgan has initiated coverage of Yangzijiang Shipbuilding with an ‘overweight’ rating and a price target of $1.80.
The price target is based on June-2012 Sum-Of-The-Parts valuation, which represents a 24% upside to the market price of $1.45.
Yangzijiang is a leading privately-owned Chinese ship-builder, listed in Singapore with a net orderbook of US$5.4 billion (as of 1Q11), producing a wide range of commercial vessels, container ships, multi-purpose ships and bulk carriers.
JP Morgan analyst Ajay Mirchandani said that YZJ is also “leader” amongst Chinese based shipyard for the container building business accounting for ~20-22% of China’s containerships order-book and is present across the “container spectrum” (2,500 -10,000 TEUs).
Recent story: YANGZIJIANG finally gets Seaspan contracts - what do analysts say?
Kim Eng Research highlights STAMFORD TYRES’ 5% dividend yield and likely strong FY12 profit
Analyst: Gregory Yap
Stamford indeed faced strong challenges in FY Apr11, including the strong S$, higher staff costs and higher rubber prices. Up until 3QFY Apr11, it looked like it would only grow by a pedestrian 10%.
However, with the help of a strong South African market, it managed to end the year on a robust note, with full-year profit up 41% YoY.
Still below book value. Despite the better results and equity endorsement by Sumitomo Rubber, Stamford still trades at just 0.7x NTA.
Arguably, it is worth more as its book value does not include the more intangible value of long-standing relationships with tyre principals such as Sumitomo and Continental, which date back to 1975.
Net gearing is not demanding at 0.17x and it generates healthy cash flow. The recently-declared dividend of 1.5 cents would provide a yield of 5% at the current share price.
Recent story: STAMFORD TYRES: FY11 net profit surged 41% on strong auto sales growth in S. Africa and China
Kim Eng Research raises target PE multiple of SARIN to 16X, price target to $1.38
Analyst: Yeak Chee Keong
Following our initiation report, Sarin’s share price has shot past our previous target price of $0.91 within a month.
We were conservative in our valuation considering the illiquidity of the stock prior to our coverage.
We may have been overly reserved and Sarin is deserving of a higher valuation. We hike our PER multiple from 14x to 16x, given that the growth momentum has gained traction, and roll over our multiple to FY12F earnings. Our target price is consequently increased to $1.38. Reiterate BUY.
