China Sky announced its M&A finally. As expected, the first acquisition
is another premium nylon producer based in
Shandong. The key positive of the purchase is that is enarlges China
Sky's client base to the north-east, the
auxilliary positive is that it provides lots of space for China Sky to
expand in futre. Consolidating Zhongda
contributions for 9M in 2008, we raise our CY08 and CY09 EPS by 37-38%.
Our target price also goes up from S$3.29 to
S$3.41, despite more conservative COE assumptions. Our new target price
implies 9x CY09 P/E, not expensive by any
means. Unlike the other fibre companies, we see no reason for China
Sky's share price to be as weak as peers
recently. Maintain Outperform.
Quick Takes
* SP Chemicals (S$0.75) - Squeezed from both ends
* Keppel Land (S$6.45) - 4QFY07 results - Expect greater
regional contributions
* SIA Engineering (S$3.82) -3QFY08 results- Strong
contributions by associates
Corporate News
* Inter-Roller secures in-flight system contract worth S$17m
* CIT distributable income for Q4 surges 59%
* SGX AsiaClear's trade values top US$4.7bn
* New business line from Creative in March
* Fortune Reit distribution income up 3% in 2007
* Chinese shipbuilder mulls Singapore listing
* Ascendas REIT acquires Acer Building and Sim Siang Choon
Building
Trading Ideas
* Ascott Residence Trust
Link to full report including important disclosures [ Click here ]
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