Username
Password
Forget Password?
  1. Indices
  2. Commodities
  3. Currencies
Straits Times 3,115.03 -11.06 -0.35%
Hang Seng 25,734.22 +238.76 +0.94%
Dow Jones 25,886.01 +306.61 +1.20%
Shanghai Composite 2,823.82 +8.03 +0.29%
Investors’ Corner
Investors' Corner | 20 February 2009
Related stocks:
B0Z
S41
By: Xavier Lim
Articles (51) Profile

China Fishery Group
Price – $0.60 Target – $1.12

China Fishery Group’s (CFG) 4Q08 net profit of US$16.2m (-10.9% yoy) was 15% below our expectation and 37% below consensus of US$25.6m, with FY08 core net profit of US$90.5m forming 97% of our FY08 estimate and 90% of consensus. Topline grew 33% to US$104.1m, on the back of higher pollock ASP and fishmeal sales in the quarter. However, gross margin fell to 26.6% from 38.5%, while net margin dropped to 15.6% from 23.2%. Given the lack of visibility for its South Pacific operations, we have lowered our revenue assumptions for South Pacific and assumed only breakeven for FY09-11. We have also trimmed our trawling ASP for FY09 given risks of lower demand due to the weak global outlook, and increased our interest expense forecasts. As a result, our FY09-10 EPS estimates fall by 9-16%. Upside to our estimates includes better-than-expected execution of its South Pacific operations and firmer fishmeal ASP, while weaker trawling ASPs present downside risks. Maintain OUTPERFORM. – CIMB-GK (16 Feb)

Hong Leong Finance
Price – $2.10 Target – $2.65

Hong Leong Finance (HLF) reported FY08 net profit of $78m, down 41.5%. The decline was primarily due to provisions for the Lehman Minibond Notes. Pre-provisioning operating profit was up 9% to $147.9m, stronger than our $139.8m forecast. Net interest income rose 8.2% to $205.6m. We expect loan loss provisioning to rise in the quarters ahead. Having said that, HLF’s conservative stance – evident from its FY08 loan contraction of 7.8% – should help to minimize the rise in NPL ratio. We lower our FY09 net profit forecast by 16% to $91.3m primarily due to an increase in our provisioning assumption from $12m to $38m. We are projecting 2009 loan contraction of 2.1%. HLF is not recommending a final dividend for FY08, in view of the difficult outlook for the year ahead. This is despite HLF’s strong Tier 1 CAR of 17%. We believe this will disappoint investors. Assuming a 49% payout ratio, 2009 dividend yield is a fairly respectable 4.8%. Maintain BUY. – DMG & Partners (16 Feb)

Jaya Hldgs
Price – $0.29 Target – $0.23

Jaya’s 2Q09 headline net profit of $26.7m came in above expectations, even after accounting for a significant forex loss of $31.7m. This was due to a large gain from vessel disposals of $39.7m, and a $2.8m unrealized gain on derivatives. Revenue fell to $37.8m due to shipbuilding division recording lower progressive recognition on fewer vessels committed for sale, while gross margins improved significantly y-o-y to 55.6%. While management has indicated that it will continue to pace its aggressive newbuild program to balance capex requirements against cash flows generated from its chartering operations and vessel disposals, we project Jaya’s net gearing to step up to 0.92x by end FY09 from 0.65x currently. Despite raising our FY09 net profit forecast to $61.9m, we are maintaining our FULLY VALUED recommendation. Financing concerns on its large capex program have yet to ease, while uncertainty surrounding its forex hedging positions will continue to be a drag on share price performance. – DBS Vickers (16 Feb)

Tat Hong Hldgs
Price – $0.60 Target – $0.53

3Q09 revenue -20% q-o-q due to weaker A$ and equipment sales. Forex loss of $22m due to Yen appreciation vs. A$ and S$. Net gearing at 38%, while free cash flow remains negative. Public construction spending may receive a boost from fiscal stimulus measures, we believe this is insufficient to offset the sharper than expected slowdown in private sector construction. As a result, industry margins will be compressed by competition and more earnings downgrades may follow. We expect Tat Hong’s equipment sales to continue downward trend while its crane rental rates may decline – mgt expects rates to decline by 5-10% in next 12 months. We also expect its provisions for bad debts and inventory write-downs may increase. Forex fluctuations may increase its earnings volatility with downside risks on A$ depreciation or Yen appreciation vs. S$. We lower FY09-11E earnings by 5-16%, after factoring in $20m of forex losses for FY09E, and higher debt and interest expenses to meet working capital needs. Maintain SELL. – Citigroup (16 Feb)

Armed with an arsenal of investment knowledge, Xavier is the Senior Research Editor at Shares Investment.

Please click here for more information about this author.

China Fishery Group  -- -- --   
Business: An integrated industrial fishing co managing fishing vessels, sells marine catch & produces fish products. [FY14 Turnover] Peruvian fishmeal (68.9%), contract supply (24.4%), china fishery fleet (6.7%).

Insight: Oct-15, Co announced that in line with its assessm... Read More
Hong Leong Finance  2.690 +0.05 +1.89%   
Business: Co provides financing and corporate advisory services.

Insight: Apr-19, 1Q19 total interest income/hiring charges ... Read More


Join The Conversation
The Shares Investment editorial team welcomes constructive feedback on our coverage and content. We would also be delighted to answer any questions on the above article. Leave us a comment below, and we'll get back to you shortly!

All Rights Reserved. Pioneers & Leaders (Publishers) Pte Ltd. Best viewed with Mozilla Firefox 3.5 and above.