Stock Name: ChinaTaisan
Company Name: CHINA TAISAN TECH GRP HLDGSLTD
AmFraser Research in a June 17 research report says: "Management has announced a 2-phase expansion plan - the acquisition of new machinery that will expand capacity by 3,500 tonnes per annum and the construction of a new factory that will add 12,000 tonnes of capacity per annum.
"Gross margins will improve in the remaining 3 quarters in FY2011 to reach 23.4% for the full financial year and stabilise at 26% for FY2012/2013. Average selling price will improve marginally in the remaining 3 quarters for FY2011 to reach RMB80,900/tonne in the final quarter.
"With their scale of operation, China Taisan ranks as one of the largest performance fabric manufacturers in the PRC. We ascribe a 7x P/E on the Group's FY2011E EPS of 3.6 cents, in line with the average forward P/E of their HK peers. This gives us a fair value of 25.0 cents. BUY"
Company Name: CHINA TAISAN TECH GRP HLDGSLTD
| Research House: AmFraser | Price Call: BUY | Target Price: 0.25 |
AmFraser Research in a June 17 research report says: "Management has announced a 2-phase expansion plan - the acquisition of new machinery that will expand capacity by 3,500 tonnes per annum and the construction of a new factory that will add 12,000 tonnes of capacity per annum.
"Gross margins will improve in the remaining 3 quarters in FY2011 to reach 23.4% for the full financial year and stabilise at 26% for FY2012/2013. Average selling price will improve marginally in the remaining 3 quarters for FY2011 to reach RMB80,900/tonne in the final quarter.
"With their scale of operation, China Taisan ranks as one of the largest performance fabric manufacturers in the PRC. We ascribe a 7x P/E on the Group's FY2011E EPS of 3.6 cents, in line with the average forward P/E of their HK peers. This gives us a fair value of 25.0 cents. BUY"
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