Wednesday, March 23, 2011

Standard Chartered initiates Mewah at Outperform

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

Standard Chartered initiates Mewah (MV4.SG) at Outperform with a $1.10 price target. It says the decline in Mewah’s share price from January 18’s $1.20 high is “misplaced and overdone.”

The house notes, Mewah is not a palm oil price play and estimates asset-less earnings exposure to the Middle East of around 10%. “We capture this Middle East exposure by applying a 10% discount to our theoretical valuation.” 

StanChart notes, Mewah is the second-largest palm refiner in Malaysia and the largest branded edible oil consumer pack entity in West Africa; “African exposure is a unique positive.” 
It adds, planned capacity expansion, particularly of value-added products, should support solid volume and value growth, and the house forecasts six-year earnings CAGR approaching 10%: “importantly, this is volume and value, rather than palm oil price-driven growth.” 
Shares are +4.4% at $0.960. 

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