Vested
Result highlights & Investment Summary
August 2, 2010• End-Mar annual net profit soared 101% yoy to HKD100.3m; EPS of HKD0.311; proposed DPS of HKD0.06.
• Prices of dried cassava chips continued to climb during the period under review, from USD160/tonne to USD173/tonne. And it rose further from USD200/tonne in Mar10 to USD215/ton at present, according to the company.
• ACR sold a total of 1.48m tonnes of dried cassava chips in FY09, up 101% yoy.
• Around 350,000 tonnes of dried cassava chips were sold to companies in ethanol fuel industry, representing an increase of 115% yoy.
• The company remained the largest supplier of imported dried cassava chips in China in 2009, commanding a market share of 35%.
• The counter fell noticeably following its annual result announcement on 26 Jul10.Street seems to have attributed the price fall to margin decline. However, we believe the company will manage to revamp its margins in coming years as new storages will commence operation and the newly acquired dry bulk vessel will help reduce transportation costs.
• ACR is, in our view, slightly undervalued at present, trading at only 4.8x FY11F PE. We set our target price at
HKD3.80 per share, or 8x FY11F PE, representing an upside of 67% over a 12-month investment horizon.
http://www.vcgroup.com.hk/CM_v2/Documen ... 0(841%20HK)%20-%20company%20update%20(2%20Aug10).pdf
It's all about "how much you made when you were right" & "how little you lost when you were wrong"