G-Resources 1051

[winston]

Not vested. From Phillips:-


Risk
The precious metals prices perform poorly;
The project's progress isn't on schedule;
Natural disasters and etc.


Worth buying for the undervalued price

G-Resources is still in the project construction period and the stock price keeps low. However, its future growth is optimistic. Plus with the upwards trend of the gold price, we think the Company is undervalued.

Its P/B is below 1.2X, nearly the lowest level in the industry, far lower than the average 3X of others. More than that, its intrinsic value is only about US$200 per ounce gold reserve, also far lower than the level over US$300 of its peers abroad.

We give it the 12m TP of HK$0.55 and Buy rating, suggesting 1.71X PB and 1.51X PB on FY2011 BVPS and FY2012 BVPS.

[winston]

Not vested. From Phillips:-


Risk

1) The price of precious metal will not go up as expected.
2) The project doesn`t proceed smoothly.


Optimistic future, continue to buy in

The projects of the firm are still in the construction period and the stock price stays low. Since the firm has multiple competitive advantages and the gold price will rise in middle and long-term, we think that the firm's stock price is under-evaluated.

In comparison with the trade data, the firm's evaluation level is at the low side from the international perspective. Hence, the firm enjoys the advantage from the evaluation perspective.

Due to the firm's small size, we give a conservative 12-month target price of HK0.71 and a buy rating, which match respectively to 13.5X P/E and 1.85 X P/B on FY2011 EPS and FY2012 BVPS.

[winston]

Not vested

G-Resources Group Ltd , backed by Mount Kellett Capital and BlackRock Inc , is on track to produce its first gold ore in the first quarter of next year, and estimated its Martable gold mine in Indonesia will produce 250,000 ounces of gold and up to 3 million ounces of silver a year when it is up and running, said Vice-Chairman Owen Hegarty.

Source: SCMP