Friday, February 25, 2011

Mewah International +1.9%; 4Q above view - CIMB

Stock Name: Mewah
Company Name: MEWAH INTERNATIONAL INC.
Research House: CIMB

Mewah International (MV4.SG) is +1.9% at S$1.05 after posting 4Q net profit of US$36.1 million, +38.9% on year, on revenue of US$1.06 billion, +16.0% on year.

CIMB notes the “strong revenue growth” and says 4Q10 core net profit (which excludes placing and listing expenses) of +57% on year at US$40.8 million ($52.1 million) was above its expectations, forming 46% of its FY10 estimate and consensus. “12M10 core net profit of US$97.1 million represents 110% of our FY10 estimate and 109% of consensus. The divergence was mainly due to lower tax rate, and foreign exchange gains.” 

The house raises its FY11-12 EPS estimates by 1%-2% on higher consumer pack margin assumptions. 
Its target price stays at $1.41, based on 13X 2011 P/E, “roughly 10% discount to the plantation sector average...due to its slimmer margins than upstream plantations.” 
It cites potential catalysts as better-than-forecast earnings, higher refining margins and announcements of earnings-accretive acquisitions. The house has an Outperform rating on the stock.
The orderbook suggests a $1.06 near-term cap.

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