Excerpts from latest analyst reports....

NRA Capital initiates coverage of SUNMART (20.5 c) with 29-c target price

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Sunmart manufactures spray pumps that are fitted to bottles of pharmaceutical products and of perfume for brand names. Photo by Leong Chan Teik
Initiate coverage with Buy recommendation. Sunmart is likely to be the first to list in Korea amongst the Singapore counters queuing for dual listing on the Korea Exchange in anticipation of rich valuation and strong pool of institutional investors.

This could be the catalyst for the share price given the fact that Korean listing allows shares to be freely interchangeable. The counter currently trades at 8.5x 2010F and 7.7x 2011F EPS before the dilution from dual listing (11.3x 2010F and 10.3x 2011F EPS after dual listing).

As the company’s operations are domiciled in China, relative valuation benchmarking against local peers would be appropriate and reasonable as they share the similar risk factors. By applying a 30% discount (to account for its smaller size) to the sector average for packaging industry of FY11 PER of 15.6x, we derive a target price of $S0.29.

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Benefit from China’s robust economy and rising retail sales. Packaging business that Sunmart is in has a close relationship with retail sales. Both fluctuate synchronically with the economic cycle. Clearly, any growth in Sunmart’s business is contingent on further recovery in consumer spending. Consumer confidence in the US and Europe remains depressed with a recovery dented by rising unemployment. Nevertheless, this is partially offset by a buoyant economy in China. China is currently fighting inflation, a problem that many western countries would love to have.


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Sunmart chairman-CEO Sun Bizhong at his HQ in Jiangyin city. Photo by Leong Chan Teik
Asiasons WFG initiates coverge with 33- cent target price

Analyst: Mark Chow

At the last traded price of S$0.21, Sunmart is trading at a FY10F PE of 8.2x and FY11F PE of 7.4x. Based on the industry prospects and company fundamentals, we initiate with a BUY recommendation with a target price of S$0.33.

The Korean listing should act as a significant catalyst and is likely to give further upward pressure to the current price as valuations in Korea tend to be richer and has the added advantage of being fungible.

Recent story: SUNMART: Dual-listing in Korea is just around the corner



OCBC Investment Research picks VALUETRONICS and VENTURE as buys in semiconductor space


Analyst: Kevin Tan 

Maintain NEUTRAL on broader technology sector. With all the challenges faced by technology companies and moderate outlook going into 2011, it is no surprise that that the sector has been underperforming in the recent months, as illustrated by a mere 1.2% returns YTD in the FTSE ST Tech Index vs. 10.4% YTD in ST Index.

Semicon_OCBC_Dec10

And with outlook of the overall technology sector still likely to remain mixed in 2011, we are thus maintaining our NEUTRAL weighting. Nevertheless, we believe there is still a lot of growth potential in specific segments, as the global economy and consumer/business confidence continue to improve.

For this reason, we maintain our BUY ratings on Avi-Tech, Karin Technology and Micro-Mechanics as they are likely beneficiaries of the market upswing. We choose Valuetronics [BUY, S$0.44 FV] and Venture Corporation [BUY, S$12.10 FV] as our preferred picks as both companies present good growth opportunities, boast healthy financial position and excellent management, and provide attractive dividend yields. 

Recent story: VALUETRONICS has a new growth engine


Share Prices

Counter NameLastChange
AEM Holdings3.770-0.040
Avi-Tech Electronics0.2850.005
Best World1.8000.080
Broadway Ind0.117-
China Sunsine0.415-0.005
DISA0.003-
Food Empire0.635-0.005
Fortress Minerals0.315-
Geo Energy Res0.3600.005
Golden Energy0.770-0.010
GSS Energy0.0500.001
InnoTek0.420-
ISDN Holdings0.410-0.010
ISOTeam0.103-
IX Biopharma0.1290.002
Jiutian Chemical0.0770.001
KSH Holdings0.355-
Leader Env0.056-
Medtecs Intl0.153-0.005
Meta Health0.024-0.001
Nordic Group0.4750.015
Oxley Holdings0.142-0.001
REX International0.230-
Riverstone0.615-0.010
Sinostar PEC0.191-
Southern Alliance Mining0.405-
Straco Corp.0.405-
Sunpower Group0.260-0.005
The Trendlines0.093-
Totm Technologies0.115-0.002
UG Healthcare0.199-
Uni-Asia Group0.810-
Wilmar Intl4.050-
Yangzijiang Shipbldg1.4300.020

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