Post Reply
21-39 of 39
From UOB KayHian:
Sino Techfibre (BUY S$1.46/TP S$2.12)
Direct Beneficiary from the Biggest New Uniform Change for Chinese Servicemen
China?s armed forces will dress up all servicemen in new uniforms within three years and the PLA garrison troops in the Hong Kong Special Administrative Region put on new uniforms on July 1, the 10th anniversary of Hong Kong's return to China. Although there have been 12 times uniform change on the PLA?s history, this time is regarded as the biggest one according to the scale as it includes all sets of uniforms (4 sets with parts types in all). This is also a gift to the 80th anniversary of the foundation of the PLA.
The total money spent will be over Rmb6b over the next three years. All the orders will be picked up by civilian companies.
Sino Techfibre has been the solo producer for the (inner and outer) belt worth over Rmb100m for the new uniforms and it has already begun to supply to PLA at the beginning of 07. Gross margin for the belt is above 60%. Due to the large orders from PLA, its percentage sales to PLA are expected to rise to 15% in 2007, up 4% from 2006 level.
Sino Techfibre is also the supplier for cap, glove, suede cloth and shoe to PLA, and it will make the criteria for servicemen?s cap which will help it to grasp most of the cap orders in the future.
Total servicemen in China is around 3.5m at the end of 2006 (exclude the arm reserve force) and overall new uniform will be around 14m sets (4 sets per person). We think this will benefit those suppliers in the long run as even after three years the PLA still need pile up inventory of new uniforms for the new recruits.
We are very positive on Sino Techfibre. Apart from the inspiring PLA orders, its soon-delivery Pattern Moulding Paper (PMP) this Nov will bring the stock to a new high. We maintain BUY with target price at S$2.12.
Best regards
Frank Rong
Research Analyst
UOB Kay Hian Investment Consulting Co., Ltd.
601, K.Wah Centre, 1010 Huai Hai Zhong Road,
Shanghai 200031, China
Tel: (86)-21-54047225-812
Fax: (86)-21-54047366
Email: frankrong@uobkayhian.com
Flying now!!!!! Good news COMING!!!!!!! Playing catch up with CG and China Sky now! Worth at least $1.80. With army contract should worth at least $2.5!!!!!!!
Catch it before it starts to fly further!!
Good news with new contract from China army coming...............CHEONG AH!!!!!!
Tomorrow targets $1.8!!!!!!!!!!!
UOBKayhian has price target of $2.12!!!
Vaulation. We think the current price do not factor in its PMP business or even
the 2 additional microfibre synthetic leather lines which will commence in 2H07.
The stock is trading at an undemanding 12x FY07 and 9x FY08 PE and there
is 66% upside under our target price of S$2.12. Our FY08 forecasts are based
on a very cautious utilisation level of 30% of its PMP business. We think the
stock will re-rate after it announced its first PMP contract in 4Q07. Reiterate
BUY.
the 2 additional microfibre synthetic leather lines which will commence in 2H07.
The stock is trading at an undemanding 12x FY07 and 9x FY08 PE and there
is 66% upside under our target price of S$2.12. Our FY08 forecasts are based
on a very cautious utilisation level of 30% of its PMP business. We think the
stock will re-rate after it announced its first PMP contract in 4Q07. Reiterate
BUY.
Look like going to break new high today, this is another SUPER STAR not to be missed by investers.
From CIMB............. grossly undervalued by market!
Sino Techfibre (S$1.40) - Initiation of Coverage - Uncharted waters, undiscovered
riches
Sino Techfibre is a pure synthetic leather maker based in Shandong. It makes both PU and
microfibre synthetic leather, used for making shoes, fashion goods, furniture and car seats.
Backed by fast-growing demand for these consumer products, the company is expanding
its capacity for synthetic leather. In addition, it has branched out to upstream products.
Investments in pattern moulding paper, if successful, could give Sino Techfibre an
important first-mover advantage in China. Downstream China shoe and apparel
manufacturers are trading at 24x CY07 P/E and 19x CY08 P/E, on average. We believe
Sino Techfibre (in the materials sector) provides cheaper exposure to burgeoning Chinese
consumption. Initiate with Outperform and a DCF target price of S$2.13 (WACC 12.3%,
long-term growth rate 2%).
long-term growth rate 2%).
hi folks ,any idea about this counter..? cant see much movement ...anyway I juz bot few lots
It rose after broker DMG initiated coverage of the stock with a "buy" call with a target price of $1.12.
"Net profit growth will remain strong at a projected 43% per annum between 2005 and 2008, driven by capacity expansion and new products," DMG said in a research note.
DMG added that demand for synthetic leather will be boosted as polyvinyl chloride (PVC) leather is phased out for environmental reasons, while supply of genuine leather will fall due to wildlife conservation.
It's moving upstream to produce pattern-moulding paper (PMP), which is necessary for the imprinting of the relevant surface patterns onto synthetic leather.
PS has a price target of $1.00
KE has a target price of $0.91, based on 6x FY08 PER.
Another broker has a target price of $1.00.