sino grandness - undervalued stock

Hentak kaki @ 45.5. WHY?

So many undervalued gems on SGX ...not enough $ to buy what I want in quantities I dream of.

DMG report dated 5 Nov and titled Starry-eyed over upcoming 3Q12

We  have  reviewed  our  numbers  and  believe  that  our  earlier earnings estimates – which were in line with consensus – may be too conservative. As such, we have raised our FY12 earnings estimates by 11%, making us the most bullish  on  the street.


We are expecting 3Q12 earnings of RMB77m vs RMB45m in 3Q11. Our bullish stance is backed by: 1) Stronger orders for its export
canned  foods  from  Europe, 2) Raised ASP and gross margin assumptions for its  asparagus  and mushroom canned foods to be in line with 2Q results, 3) Lower  opex  and  finance  cost assumptions.

This has resulted in our net margins  rising  from 14.1%  to 15.5%. We change our valuation methodology from sum-of-parts  to  P/E  and derive a higher TP of S$0.65, pegged to 3x FY13F earnings (mean historical trading band). Results will be announced on Nov 6th after market close with a results briefing to be held the following day. Upgrade to BUY. 

3Q profits were most surprising. Hope the stock price can run from here on. In the past, solid profit announcements have not been successful in triggering a sustained price rise.