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CIMB has a price target of $1.20. Super Undervalued stock????
Plymouth Yongle Tape JV ramping up. Recent sterling 3Q06 results signal
good earnings growth prospects for CHT over the next two years. Utilisation rates
should surge to 80% in FY07 with margin expansion led by efficiency gains and a
higher-margin product mix supporting earnings growth through FY08.
good earnings growth prospects for CHT over the next two years. Utilisation rates
should surge to 80% in FY07 with margin expansion led by efficiency gains and a
higher-margin product mix supporting earnings growth through FY08.
? Vertically integrated operations and international quality standards are key
competitive advantages. As a vertically integrated manufacturer, CHT has been
able to manage operating margins of 20-24% over the past four years despite a
doubling of oil prices. The Plymouth JV showcases CHT?s ability to deliver
specialised products that meet high quality standards at competitive costs.
competitive advantages. As a vertically integrated manufacturer, CHT has been
able to manage operating margins of 20-24% over the past four years despite a
doubling of oil prices. The Plymouth JV showcases CHT?s ability to deliver
specialised products that meet high quality standards at competitive costs.
able to manage operating margins of 20-24% over the past four years despite a
doubling of oil prices. The Plymouth JV showcases CHT?s ability to deliver
specialised products that meet high quality standards at competitive costs.
? Attractively valued by various measures. Despite its recent share-price
appreciation post-3Q06 results, CHT continues to trade at 5.9x CY07 fully-diluted
P/E, 1.1x CY07 P/NTA and 4.1x CY07 EV/EBITDA, backed by a 5.1% prospective
FY07 dividend yield and projected core earnings growth of 30%.
appreciation post-3Q06 results, CHT continues to trade at 5.9x CY07 fully-diluted
P/E, 1.1x CY07 P/NTA and 4.1x CY07 EV/EBITDA, backed by a 5.1% prospective
FY07 dividend yield and projected core earnings growth of 30%.
? Maintain Outperform and target price of S$1.20. Our target price remains
based on 8.5x CY07 P/E. With 74% potential upside, reiterate Outperform rating.
based on 8.5x CY07 P/E. With 74% potential upside, reiterate Outperform rating.
NRA has a price target of $0.75. The brokerage noted that CHT's earnings visibility improved considerably after its JV Plymouth Yongle received certification that will enable the firm to manufacture and sell its products to two automobile components parts manufacturers, Delphi Corp and Lears.
"Primary growth driver and price catalyst will be the volume expansion from Plymouth JV. With the turnaround realized in the Plymouth plant, we are reasonably positive that the volume growth will contribute to the top line considerably," NRA said in a note.
"Uplifted by rising orders from Delphi Corp, we believe that the current share price has yet to capture the earnings upside," it added.
NRA expects CHT earnings to grow to RMB132.1m this year from RMB113.6m last year, and further to RMB148.5m in 2007.