Stock Name: Dukang
Company Name: DUKANG DISTILLERS HLDGS LTD
UOB KayHian in a Feb 8 research report says: "Since acquiring the Dukang brand in 2010, Dukang Distillers Holdings (DDH) has made headway in restoring the brand's former glory as a national icon synonymous with baijiu, a spirit distilled from wheat and sorghum.
"Under DDH, sales of Dukang products hit a record Rmb581.8 million in 9MFY11, a twofold increase from 9MFY10. The group has ambitious plans to revive the brand, which involve: (a) fine-tuning its product mix under a unified brand, (b) aggressive nationwide advertising campaigns, and (c) expanding and strengthening its distribution network.
"Target price of 51 cents, representing 32.5% upside from the current price. Our valuation is based on a target PEG of 0.4x, which is at a 20% discount to peers' average of 0.5x. BUY (initiating coverage)."
Company Name: DUKANG DISTILLERS HLDGS LTD
| Research House: UOB KayHian | Price Call: BUY | Target Price: 0.51 |
UOB KayHian in a Feb 8 research report says: "Since acquiring the Dukang brand in 2010, Dukang Distillers Holdings (DDH) has made headway in restoring the brand's former glory as a national icon synonymous with baijiu, a spirit distilled from wheat and sorghum.
"Under DDH, sales of Dukang products hit a record Rmb581.8 million in 9MFY11, a twofold increase from 9MFY10. The group has ambitious plans to revive the brand, which involve: (a) fine-tuning its product mix under a unified brand, (b) aggressive nationwide advertising campaigns, and (c) expanding and strengthening its distribution network.
"Target price of 51 cents, representing 32.5% upside from the current price. Our valuation is based on a target PEG of 0.4x, which is at a 20% discount to peers' average of 0.5x. BUY (initiating coverage)."
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