Stock Name: CWT
Company Name: CWT LIMITED
Kim Eng Research in a July 1 research report says: "CWT announced its biggest acquisition to date, agreeing to pay US$94 million ($116.5 million) for a 73.8% stake in MRI Trading AG, a Switzerland-based commodity trading house.
"We believe the purchase valuation (about 6x PER and 1.5x P/B) is a fair one, with sufficient mechanisms to align all parties. The transaction is expected to be completed within three months and will contribute fully in 2012.
"CWT has a net cash position of $120.6 million and can comfortably pay for this acquisition, which will change its earnings and ROE profile substantially. We factor this development into our FY2012 and FY2013 numbers but keep our target price based on FY11F unchanged for now. Target price of $1.90. BUY"
Company Name: CWT LIMITED
| Research House: Kim Eng | Price Call: BUY | Target Price: 1.90 |
Kim Eng Research in a July 1 research report says: "CWT announced its biggest acquisition to date, agreeing to pay US$94 million ($116.5 million) for a 73.8% stake in MRI Trading AG, a Switzerland-based commodity trading house.
"We believe the purchase valuation (about 6x PER and 1.5x P/B) is a fair one, with sufficient mechanisms to align all parties. The transaction is expected to be completed within three months and will contribute fully in 2012.
"CWT has a net cash position of $120.6 million and can comfortably pay for this acquisition, which will change its earnings and ROE profile substantially. We factor this development into our FY2012 and FY2013 numbers but keep our target price based on FY11F unchanged for now. Target price of $1.90. BUY"
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