UOB starts China Fishery at buy, target $2.48

Stock Name: China Fish
Company Name: CHINA FISHERY GROUP LIMITED
Research House: UOB KayHian

UOB Kay Hian has initiated coverage of Singapore-listed China Fishery (CNFG.SI), an industrial fishing company, with a buy recommendation and a target price of $2.48.

UOB said it expects China Fishery, one of the largest and most profitable fisheries in the world with operations in North and South Pacific and Peru, to continue benefitting from resilient fish consumption and rising prices.

China Fishery is currently traded at a 22% discount to its peers outside of China, even though it has better growth prospects and higher profitability, UOB said.

The brokerage noted that it has a gross margin of 37% compared to an average of 30.6% for its peers.

“China Fishery could benefit from increased prices in the near term due to a shortfall in seafood supply from Japan, a key seafood exporter,” in the wake of a massive earthquake that struck the country, UOB said.

China Fishery shares have plunged 20.5% since the start of the year to close at $1.78 on Wednesday.