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DJ MARKET TALK:Nomura Starts Kunlun Energy At Buy;HK$13.50 Target
0827 [Dow Jones] STOCK CALL: Nomura starts Kunlun Energy (0135.HK) at Buy, target price pegged at HK$13.50.
Says company "running on two legs" with hybrid (E&P, natural gas) business model; supported by parent PetroChina's (0857.HK) rich gas resources, Kunlun well positioned to capture China's robust natural gas demand growth; forecasts strong earnings CAGR of 50% over FY09-12, driven by strong natural gas volumes, supported by E&P.
Adds, stock trading at 16.6X FY11 P/E, 2.8X FY11 P/B, at discount to natural gas peers at 18.5X, 3.2X, "we find its valuation compelling."
Kunlun ended Thursday +0.9% at HK$10.84.
Source: Dow Jones Newswire