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1-5 of 5
7x 2009 PER is still expensive based on current sentiment. FV should be around 17c
DBS KEPT BUYING RATE,,,,,,////////?????????
Could it be some personal interest involved? Trust the fact and most possible future development, rather than any body's analysis I suppose, especially in Global Financial Tsunami uncertain global stocks revaluation and deleveraging various asset classes in process!!!
richtan ( Date: 09-Jan-2009 12:24) Posted:
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DBS Group Research . Equity
Attractive valuations versus growth
We believe CHHS’ earnings should grow at a CAGR of almost 20%
between FY08 and FY10, driven by the Group’s plans to continue
expanding its number of points-of-sales by 600 per annum over the next
2 years. Backed by net cash/share of S$0.17, we believe CHHS is
significantly undervalued and reiterate our Buy call with TP at S$0.32,
pegged to 7.0x PER09.
Investor interest remained keen at our ‘Pulse of Asia’ Conference.
China Hongxing had the opportunity to meet up with over 30 fund
managers and buy-side analysts, with a packed group presentation
meeting, to provide an update on their business.
Earnings growth intact
it should continue to see firm top line growth, driven by its aggressive
store expansion plan to open 600 POS per year in FY09 and FY10, which
will bring the number of stores from c. 3,850 by end FY08 to 5,050 by
end FY10. At the same time, the Group believes that with a fast-growing
segment of middle class consumers and affordability of its products
versus international brand names, that it can continue to capture more
market share. Hence, we maintain our projections that earnings of CHHS
can grow at a CAGR of almost 20% between FY08 and FY10, from 3.8
Scts to 5.4 Scts, driven mainly by its expanding store network. . China Hongxing maintained its optimism that
RMB1.0b+ prepayment expected to be duly collected.
prepayment paid by CHHS on behalf of distributors to secure prime
locations for new stores would be completely collected by early 2010. So
far, there has been no delay or default of distributors’ repayment. The
management has no plan to carry out such scheme again in future. The
Margins sustainable.
improve in the long term, driven by a better sales mix from the highermargin
apparel and accessories segments. Since A&P budget is pegged
to revenue and there’s not much debt, the operating margin and net
margins are also expected to improve over time. The company’s overall gross margin should also
Attractive Valuation.
only 4.0x FY10 earnings, which is significantly under the peers’ average
about 7.3x FY09. Maintain Buy, with our target price at S$.032, pegged
at 7.0x PER09, backed by S$0.17 of net cash/share. Valuations are undemanding at 4.7x FY09 and
richtan ( Date: 09-Jan-2009 12:10) Posted:
(XFN-ASIA) - DBS said it kept its "buy" rating on Singapore-listed sportswear maker China Hongxing Sports as the company's earnings should grow on expansion plans.
However, the brokerage slightly lowered its price target to 0.32 sgd from 0.33 sgd.
"We believe China Hongxing's earnings should grow at a CAGR of almost 20 pct between fiscal year 2008 and fiscal year 2010, driven by the group's plans to continue expanding its points of sales by 600 per annum over the next two years," DBS said in a note to clients.
DBS said the company, which is backed by net cash per share of 0.17 sgd, is significantly undervalued.
China Hongxing's overall gross margins should also improve, driven by better sales mix from the higher-margin apparel and accessories segments, DBS said |
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DBS Group Research . Equity
Attractive valuations versus growth
We believe CHHS’ earnings should grow at a CAGR of almost 20%
between FY08 and FY10, driven by the Group’s plans to continue
expanding its number of points-of-sales by 600 per annum over the next
2 years. Backed by net cash/share of S$0.17, we believe CHHS is
significantly undervalued and reiterate our Buy call with TP at S$0.32,
pegged to 7.0x PER09.
Investor interest remained keen at our ‘Pulse of Asia’ Conference.
China Hongxing had the opportunity to meet up with over 30 fund
managers and buy-side analysts, with a packed group presentation
meeting, to provide an update on their business.
Earnings growth intact
it should continue to see firm top line growth, driven by its aggressive
store expansion plan to open 600 POS per year in FY09 and FY10, which
will bring the number of stores from c. 3,850 by end FY08 to 5,050 by
end FY10. At the same time, the Group believes that with a fast-growing
segment of middle class consumers and affordability of its products
versus international brand names, that it can continue to capture more
market share. Hence, we maintain our projections that earnings of CHHS
can grow at a CAGR of almost 20% between FY08 and FY10, from 3.8
Scts to 5.4 Scts, driven mainly by its expanding store network.
. China Hongxing maintained its optimism that
RMB1.0b+ prepayment expected to be duly collected.
prepayment paid by CHHS on behalf of distributors to secure prime
locations for new stores would be completely collected by early 2010. So
far, there has been no delay or default of distributors’ repayment. The
management has no plan to carry out such scheme again in future.
The
Margins sustainable.
improve in the long term, driven by a better sales mix from the highermargin
apparel and accessories segments. Since A&P budget is pegged
to revenue and there’s not much debt, the operating margin and net
margins are also expected to improve over time.
The company’s overall gross margin should also
Attractive Valuation.
only 4.0x FY10 earnings, which is significantly under the peers’ average
about 7.3x FY09. Maintain Buy, with our target price at S$.032, pegged
at 7.0x PER09, backed by S$0.17 of net cash/share.
Valuations are undemanding at 4.7x FY09 andrichtan ( Date: 09-Jan-2009 12:10) Posted:
(XFN-ASIA) - DBS said it kept its "buy" rating on Singapore-listed sportswear maker China Hongxing Sports as the company's earnings should grow on expansion plans.
However, the brokerage slightly lowered its price target to 0.32 sgd from 0.33 sgd.
"We believe China Hongxing's earnings should grow at a CAGR of almost 20 pct between fiscal year 2008 and fiscal year 2010, driven by the group's plans to continue expanding its points of sales by 600 per annum over the next two years," DBS said in a note to clients.
DBS said the company, which is backed by net cash per share of 0.17 sgd, is significantly undervalued.
China Hongxing's overall gross margins should also improve, driven by better sales mix from the higher-margin apparel and accessories segments, DBS said |
|
(XFN-ASIA) - DBS said it kept its "buy" rating on Singapore-listed sportswear maker China Hongxing Sports as the company's earnings should grow on expansion plans.
However, the brokerage slightly lowered its price target to 0.32 sgd from 0.33 sgd.
"We believe China Hongxing's earnings should grow at a CAGR of almost 20 pct between fiscal year 2008 and fiscal year 2010, driven by the group's plans to continue expanding its points of sales by 600 per annum over the next two years," DBS said in a note to clients.
DBS said the company, which is backed by net cash per share of 0.17 sgd, is significantly undervalued.
China Hongxing's overall gross margins should also improve, driven by better sales mix from the higher-margin apparel and accessories segments, DBS said
