Excerpts from latest analyst reports.....
DBS Vickers says XINREN (30 cents) is 'extremely undervalued' and a proven player
Analyst: Lee Eun Young
A year after its IPO, Xinren is now a proven player. We believe Xinren’s management have proven themselves in their ability to enhance shareholder value and build the company’s reputation for reliability.
Xinren acquired a direct stake in two smelting plants in China in Mar 2011 (after highlighting the risks to investors). In addition, the company completed a buyback of 1.8m shares (RMB3.1m) in Sep FY11 and intends to buy more by the end of the year.
It also announced that it intended to pay a dividend in FY11. More importantly, the company has released a resilient set of results over the last year despite being buffeted by fluctuating aluminum prices. Its investment in carbon anodes and fabrication products should help bring costs down as well as enable the company to tap the growth in demand for aluminium in China.
Retain BUY but lower TP to S$0.65 pegged at 8.5x FY12F PE or a 20% discount to the weighted average valuation of its regional peers. This also assumes a downward revision of FY12F EPS by 6.2% coupled with a 6.9% cut on aluminium price assumptions for FY12.
Xinren is extremely undervalued and is trading at FY12 3.8x P/E and 0.8x P/BV.
Recent story: XINREN: China's aluminum demand stable despite uncertain economy
DBS Vickers says ARA is "Asia’s finest asset manager"
Analyst: Derek Tan CPA
• 3Q11 results above expectations
• Dragon Fund II on track to raise US$1bn by 1Q12; potential 1 new REIT of S$1bn to be launched
• Maintain BUY with revised TP of S$1.67
Another strong quarter. ARA’s reported 3Q11 PATMI of S$25.4m (+95% y-o-y) on top of an 83% hike in revenues to S$45.0m. The strong growth was largely attributed to performance fees by Harmony Fund, which achieved an exit IRR of 64.8% upon divestment of interests by certain private investors and acquisition fees from Suntec REIT’s increased stake in Harmony fund.
This was supported by higher recurring REIT base and performance fees due to the enlarged Suntec REIT AUM post-acquisition of its 1/3 stake in MBFC phase 1.
The higher PATMI performance was also boosted by the contribution of associate income from fees earned as REIT manager of Hui Xian REIT.
AmFraser says YANGZIJIANG stock could triple in 3 years
Analyst: Lee Yue Jer
We continue to value YZJ at 8x FY11F earnings, for a FV of $1.60, and expect a $0.06 dividend this year. We feel that our 8x peg is slightly low, and offers significant revaluation potential should markets recover in future.
At a more normal 10-12x P/E, YZJ would be worth $2.00-$2.40 in good times (3 year target).
Investors who heeded our call to average down earlier last month at $0.80 would be sitting on a stock with nearly an 8% yield with the potential to triple in the next 3 years.
We find this combination difficult to discover elsewhere. BUY.
Recent story: YANGZIJIANG chairman is E&Y Entrepreneur of the Year China 2011