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DJ MARKET TALK: UOBKH Cuts Lianhua Supermarket Target To HK$15
Sep 21, 2011
0923 [Dow Jones] STOCK CALL: UOB KayHian cuts its target for Lianhua Supermarket (0980.HK) to HK$15.00 from HK$18.00, with the new target based on 16.5X FY12 P/E.
While the house has not revised its earnings estimates, it's aware of the stock's recent weakness, after it fell 37.5% following the announcement of its 1H11 results on August 10, versus the HSI's 10% decline in the same period.
"Management confirmed that the company's fundamentals are still the same and daily operations are as usual. There are no quality or corporate governance issues."
Competition in the supermarket industry in Yangtze Delta has intensified as more international retailers enter the market, but Lianhua will continue to focus on this area to become a regional leader, it notes.
It keeps the stock at Buy.
Source: Dow Jones Newswire