Asian Citrus 0073

[winston]

Not vested. From Phillips:-


Risks
The price of raw materials and staff costs increase significantly.
The production growth can`t reach expectation;
Marketing competition is intensified.


Valuation
Against the background of consumer market continuing to do well in China, we overweight its earnings growth brought by production outbreak, industry chain extension and market channel optimization. We estimate its EPS will reach RMB 0.90, 1.06, 1.27 in FY11-13.

The latest closed price (30 Nov 2010) of Asian Citrus is HKD9.30, representing leading PE of 8.84X and 7.50X on EPS of FY11E and FY12E. Considering peers` valuation and Asian Citrus's good earnings prospect, we give it a leading PE of 9X on EPS of FY12E which produces a 12-month target price of HKD11.13, 16.42% higher than current price.

We rate it BUY initially.

[winston]

Not vested. From Phillips:-


Risks

1) Price of fertilizers unexpectedly grows significantly;
2) The growth of production doesn`t reach expectation.


Valuation

The latest closed price (3 March 2011) is HK$9.01, leaving core leading PE of 12x and 9x on core EPS of FY11-12E.

Considering peer's average valuation level, we believe the consolidated fundamental worth higher valuation.

We give it a 12-momth target price of HK$11.00 with a premium of 22.09% on current price and reiterate the rating of BUY.

[winston]

Asian Citrus Tumbles in Hong Kong to Lowest Level on Record
By Kana Nishizawa and Michelle Yun

Oct. 1 (Bloomberg) -- Asian Citrus Holdings Ltd., an owner and operator of orange plantations in China, fell to the lowest level on record in Hong Kong trading. The company has ties to companies owned by a man accused of insider trading.

Asian Citrus, which reported a 90 percent surge in its full-year profit on Sept. 16, tumbled 28 percent to HK$3.62 in Hong Kong yesterday, its lowest closing price since its debut in November 2009. That compares with the 2.3 percent drop by the benchmark Hang Seng Index.

The company is 13 percent owned by Chaoda Modern Agriculture Holdings Ltd. and buys organic fertilizer from Fujian Chaoda Group, 95 percent owned by Chaoda Modern Chairman Kwok Ho, according to a Hong Kong stock exchange filing yesterday.

http://www.businessweek.com/news/2011-0 ... ecord.html

[investar]

Someone called this a 'deep value' stock... True or trap?

[investar]

Apparently true... from 0.65 to 2 HKD yesterday in 3 months.