Company Name: CONSCIENCEFOOD HOLDING LIMITED
Research House: DBS Vickers
Shares of Singapore-listed Conscience Food <CSHL.SI>, a manufacturer and seller of instant and snack noodles in Indonesia, rose as much as 8% on Friday after DBS Vickers initiated a “buy” on the firm with a target price of $0.38.
At 10:16 a.m., Conscience Food shares were up 6% at $0.265 on a volume of 25.7 million shares.
“The share price went up because DBS has a ‘buy’ call on the stock. It is an Indonesian company and the market in Indonesia is very big because of the large population size, so there are strong growth prospects there,” said a local trader.
DBS Vickers said the immediate growth driver of Conscience Food, which sells its products across six provinces on Sumatra island, is its expansion into cup noodle production in its 2011 financial year.
The brokerage added that the firm is planning to establish or acquire a production facility around Jakarta, Indonesia’s capital, to reduce reliance on its original equipment manufacturing suppliers and lower production costs.
DBS has valued Conscience Food shares at $0.38, based on seven times the firm’s 2011 financial year earnings, adding that the main risk is its inability to ramp up its upcoming capacity on time.
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