Credit Suisse: CHOW SANG SANG Target Hiked to 25 hkd
Credit Suisse said it is raising its target price on leading jewelry retailer Chow Sang Sang (HK: 116) to 25 hkd from 20 hkd (recently 17.1 hkd) while reiterating its “Outperform” recommendation on the Hong Kong-listed enterprise.
“Following the US FOMC announcement of the launch of the QE3, we expect jewelers to see realized gold inventory holding gains in the coming months, which will be reflected in higher gross margins,” CS said.
The Swiss research house also raised Chow Sang Sang's FY2012-13 EPS forecast by 4-7% on the back of margin improvement resulting from its 40% hedging ratio on gold price exposure.
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Kingston: LENOVO “Buy” on Cloud Pickup
Kingston Securities said it is staying “Buy” on Lenovo (HK: 992), the world’s No.2 personal computer maker, with a buy-in price of 6.4 hkd, a target price of 7.0 hkd and a stop-loss price of 6.15 hkd.
“Lenovo recently announced the acquisition of U.S. Cloud system software firm Stoneware which will be completed by the end of 2012.
“This acquisition may not contribute to immediate profit, but may bring long term benefits to the Group since the development of Cloud computing is becoming mainstream,” Kingston said.
The Group set up a US personal computer production line in North Carolina which will commence operation in early 2013.
“Although it would increase production costs, the Lenovo could offer a more flexible after-sale services and product customization to US customers,” Kingston added.
The research house said Lenovo’s overall brand image is expected to be upgraded.
“The Group also owns production plants in China, Brazil and elsewhere to provide additional services for local consumer and business needs.
“For the three months ended June 2012, revenue increased 35.3% to $8.01 billion usd.
Notebook computer and desktop computer businesses accounted for 54% and 32% of total revenue, respectively.
Revenue from China climbed 24% to 3.52 billion usd, and continued to be the biggest contributor among the country markets.
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