Consciencefood - Consciencefood started at Buy by DBS, $0.38 target

Stock Name: Consciencefood
Company Name: CONSCIENCEFOOD HOLDING LIMITED
Research House: DBS Vickers

DBS Vickers starts Consciencefood Holding (L1D.SG) at Buy with a $0.38 target based on 7x FY11 P/E.

Says the immediate growth driver for the Indonesia-based instant noodles maker is its expansion into cup noodle production in FY11.

Adds, cup instant noodles have higher selling prices and profit margins; “as a food manufacturing company, we see very little risks apart from natural disasters and contamination issues. The main risk to our earnings forecast is CSF’s inability to ramp up its upcoming capacity on time.”

Cites CSF’s extensive network of 55 distributors in Indonesia and string of international networks as a key strength. Shares +11.1% at $0.25.