Qingmei Group Holdings rated 'buy' by CIMB

Stock Name: Qingmei
Company Name: QINGMEI GROUP HOLDINGS LIMITED

Research House: CIMB

Price Call: BUY

Target Price: 0.241

CIMB in a Feb 6 research report says: "Qingmei is currently a vertically integrated manufacturer of mid- to high- end sports shoe soles. With a projected yield of 14.3% in FY12F, this stock is a steal at current price.

"Qingmei currently trades at undemanding 1.7x CY13 P/E vs historical average 2.6x. With a high cash net per share of 14.1 cents in 1QFY12, we believe the stock is a steal. Target price of 24.1 cents, based on 2.6x CY13 estimates (its historical average forward P/E). This offers an upside of 49.9%.

"With all shoe soles registering growth of roughly 7-11%, even amidst the slower economic backdrop in 2011, we are confident that Qingmei has the right recipe to continue healthy growth uptrend. This is reflected in its ability to keep ASP's stable, while boosting overall sales. BUY (initiating coverage)."

CIMB initiates Qingmei with buy rating

Stock Name: Qingmei
Company Name: QINGMEI GROUP HOLDINGS LIMITED

Research House: CIMB

Price Call: BUY

Target Price: 0.241

CIMB initiated coverage of Singapore-listed Chinese sports shoe maker, Qingmei Group Holdings, with a buy rating and a price target of $0.241.

By 12:00 p.m., Qingmei shares were around 4.4% higher at $0.168. The company’s shares fell 55.6% last year.

CIMB said Qingmei is “a steal at current price” due to its high net cash level of $0.141 per share. The firm also offers an attractive dividend yield estimated at 14.3% for the fiscal year ending June 2012.

The broker said demand for sports shoes in China will likely remain high, helped by government efforts to promote sporting activities. It quoted research firm Frost & Sullivan, which predicts 16.1% annual growth in China’s sports shoes market from 2010 to 2015.