China Animal goes to Hong Kong

Since our last note on China Animal last week, the stock has performed very well, rising on strong volume to a record high of S$0.43.

Following that note, we would like to remind investors of China Animal’s proposed dual listing on the Hong Kong Stock Exchange. For investors who wish to transfer their shares to the Hong Kong Stock Exchange, China Animal will bear the costs, fees and duties payable for the share transfers, less for the withdrawal fees payable to CDP.

This presents an opportunity for investors to transfer their shares to a stock exchange with better valuations as compared to the SGX, and shares appear cheaper in Singapore as compared to Hong Kong . Investors will be able to purchase China Animal shares in Singapore and sell their shares in Hong Kong , which could offer a better price.

Yesterday, we saw closure of the 2nd batch transfer, and the 3rd batch transfer will cease on 20 December 2010. There could be further interest in China Animal shares in the coming week.

We currently have a Buy recommendation with target price of S$0.52.