Cosco, Reyphon Agriceutica, China Sunsine Chemical Holdings Ltd

Cosco delivers semisub lower pontoons ahead of schedule – Analyst Comments
Cosco has announced that it has successfully delivered pontoons for two semi-submersible rigs to Jurong Shipyard well ahead of schedule. In the process, Cosco says it has passed stringent multi-level quality control checks and a slew of comprehensive safety procedures. Contracted in April 2006, for around US$31m, the project will be significantly recognized in the current quarter. Cosco also says that the effective completion of this project is evidence of the growing technical competence of its shipyard business.
Cosco has seen its stock price surge by 42% since the beginning of the month, on contracts announced worth US$1.2bn as well as a more positive outlook for its overall prospects. Cosco remains our top pick within the shipyard sector, and we believe that its long term prospects remain excellent on the back of its capacity additions at Zhoushan, more shipbuilding contracts from its parent, and potential acquisitions in order to secure more capacity.
Our 3 year forward forecast remains unchanged, where we estimate a 3-yr earnings CAGR of 40% p.a. However, we believe that the stock can be re-rated higher than our current DCF-based target of S$4.05 per share, based on a longer term outlook. We maintain our BUY recommendation on Cosco.

Reyphon Agriceutical – The China-based subsidiary of mainboard-listed water treatment firm Sinomem Technology is seeking its own listing on the SGX mainboard. In its preliminary prospectus, lodged on Thursday with the MAS, Reyphon said that listing proceeds would be used to expand capacity, fund R&D, strengthen its sales network, and as working capital. There is no minimum amount which Reyphon seeks to raise. The company's pre-listing issued and paid-up share capital is $5.9m in 240m shares. Reyphon is located in Xin'gan County, Jiangxi Province. It uses fermentation biotechnology to make gibberellic acids - which regulate plant growth - and validamycin, a plant antibiotic. With an annual gibberellic acid production capacity of 101 tonnes, it is one of China's largest producers. Reyphon's revenue for FY2006 was RMB145.3m (S$29.3m), up from RMB100.6m the year before. Profit after tax was RMB42.3m, up from RMB19.8m.

China Sunsine Chemical Holdings Ltd – Is seeking to list on the SGX and has lodged its preliminary prospectus with the MAS. The company, which has its production facilities in the Shandong Province, produces rubber chemicals such as rubber accelerators and anti-scorching agents. They also source and supply anti-oxidant agents and other types of rubber accelerators. Rubber accelerators contribute to the bulk of the company's total revenue, accounting for around 97.9% in FY2006. According to the preliminary prospectus, its directors believe that it is one of the largest rubber accelerator makers in the world and in the PRC, in terms of production capacity. However, as most of its total revenue come from sales to both domestic and overseas tyre manufacturers, its demand hinges on the growth of the tyre industry. Revenue for FY2005 increased by about 82.2% Y/Y from RMB238.3m (S$48m) to RMB434.1m. In comparison, revenue for FY2006 was RMB474.7m, an increase of around 9.4% from FY2005.