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AMCapital has overtook may bank Kim eng to be the most bullish brokerage on this stock.
We initiate research coverage on Sino Grandness (SG) with a bullish BUY and SG$1.51 target price. Recent results showed strong performance in all areas with high margins of 32%-52% exceeding expectations. SG?s canned export business saw improving orders from Germany, whilst the domestic fruit business sold higher margin products. The beverage division is key, as a spin off in Hong Kong in 2014 could attract multiples of 15x valuing the division higher than the current SGX listco. BUY, 110% upside.
A Hong Kong beverage spin off will unlock value
Guidance for the beverage division earnings for 2013 is approx SG$50m (RMB245m) - we believe profits will be RMB267 for 2013 with growth of 25% in 2014. Listing the division in Hong Kong before Q314 at a conservatively assumed multiple of 15x (comparable Huiyuan?1886.HK trades at 30x), values the division at approx SG$1bn. When compared to SG?s current market cap we cannot justify the stock to trade at 4x 2014 with such a valuable business segment under its operations.
Unique loquat juice
Loquat juice evokes medicinal and healthy attributes in China. The market has very few competitors. SG has also obtained a ?seal of approval? from the CNIF to establish national quality standards for loquat juice. We believe the product is a clear differentiator amongst peers with a growing range of pure and mixed juices to maintain market share and brand awareness. We expect 59%/28% growth in beverage sales in 2013/2014 whilst expansion plans and a push into other provinces will improve penetration rates.
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We believe SG can maintain steady high single digit sales growth from 2013-2015 at the canned overseas division whilst growing the higher margin SG branded domestic canned fruit business. The beverage division will remain a pillar of growth with expectations of 59%/28%/27% sales growth between 13-15 and margins of low 40%. We cannot justify current 4x valuation multiples from a company making unlevered 29% ROEs.
A Hong Kong beverage spin off will unlock value
Guidance for the beverage division earnings for 2013 is approx SG$50m (RMB245m) - we believe profits will be RMB267 for 2013 with growth of 25% in 2014. Listing the division in Hong Kong before Q314 at a conservatively assumed multiple of 15x (comparable Huiyuan?1886.HK trades at 30x), values the division at approx SG$1bn. When compared to SG?s current market cap we cannot justify the stock to trade at 4x 2014 with such a valuable business segment under its operations.
Unique loquat juice
Loquat juice evokes medicinal and healthy attributes in China. The market has very few competitors. SG has also obtained a ?seal of approval? from the CNIF to establish national quality standards for loquat juice. We believe the product is a clear differentiator amongst peers with a growing range of pure and mixed juices to maintain market share and brand awareness. We expect 59%/28% growth in beverage sales in 2013/2014 whilst expansion plans and a push into other provinces will improve penetration rates.
Intra Day
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Technical Analysis
Daily Chart
Hidden value
We believe SG can maintain steady high single digit sales growth from 2013-2015 at the canned overseas division whilst growing the higher margin SG branded domestic canned fruit business. The beverage division will remain a pillar of growth with expectations of 59%/28%/27% sales growth between 13-15 and margins of low 40%. We cannot justify current 4x valuation multiples from a company making unlevered 29% ROEs.
Patience, it's currently having some profit taking since hitting resistance of .795.
It should run in the near future.
BullsAndBear ( Date: 18-Nov-2013 11:26) Posted:
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Scooping up some of this unloved share at $0.745.
This stock just reported 3Q/13 results that outperformed and its share price is dropping ?? Looks like a good time to accumulate.
Target price by Maybank Kim Eng research team : $1.00
Source: http://maybank-ke.com.sg/reseach.htm
~~ Sleepy Monday ~~
today intraday high was 79.5..low was 74.5...a lot of intraday traders push n sell....good stock for holding..lets see if can cross 80 and above......
Broke out of .785. Time to Enter People!
SINGAPORE ? 14 November 2013 ? Mainboard-listed Sino Grandness Food Industry Group Limited 中 华 食 品 工 业 集 团 有 限 公 司 (?Sino Grandness? or ?the Company? and together with its subsidiaries, the ?Group?), a Shenzhen, the PRC based integrated producer and distributor of own-branded juices and canned fruits and vegetables today reported a positive set of results for the third quarter ended 30 September 2013 (?3Q13?) .
Driven by higher orders across the board, especially that of own-branded products such as 鲜 绿 园 ® (?Garden Fresh?) juices from its beverage segment and 振 鹏 达 ® (?Grandness?) canned fruits from domestic canned products segment, net profit attributable to equity holders surged 99.0% to RMB168.1 million in 3Q13 compared to RMB84.5 million in the same period last year (?3Q12?). For the first nine months ended 30 September 2013 (?9M13?), net profit attributable to shareholders also jumped 52.4% to RMB341.7 million from RMB224.2 million in the same period a year ago (?9M12?).
On track to achieve record profit in FY2013
Mr Huang Yupeng 黄 育 鹏 , Chairman and CEO of Sino Grandness said, ?I am extremely pleased to report a positive set of results which reflected strong growth momentum across all business segments. In particular, our own-branded product segments continued to deliver exceptional growth, with sales of beverage and domestic canned products surging 78.8% and 94.3% respectively in 3Q13 driven by positive macro factors in the PRC market such as increased health awareness, growing demand for convenience food and beverage products and rising disposable income. As our first nine months net profit has already exceeded that of the full year 2012, barring unforeseen circumstances, we are on track to deliver record net profit for FY2013.?
Higher orders across the board
Revenue analysis by segments:
In 9M13, revenue of the Group increased by 39.2% to approximately RMB1,728.1 million from RMB1,234.6 million in 9M12. The increase in revenue was attributable to higher orders across the board. Sales of beverage segment which comprised Garden Fresh juices surged 60.5% in 9M13 to RMB1,021.8 million from RMB636.6 million in 9M12 due to further expansion of distribution network in the PRC market. The increase in revenue of overseas and domestic canned food products was mainly due to increased production capacities and higher orders from major customers in both overseas and PRC market
Strong Growth Momentum For Garden Fresh Bottled Juices Continued Into 3Q13
Garden Fresh juice sales in RMB million
3Q
9 months (9M)
Jul ?Sept 2013
Jul ? Sept 2012
Change
Jan ? Sept
2013
Jan ? Sept
2012
Change
Product segment
RMB?000
RMB?000
%
RMB?000
RMB?000
%
Canned products
- overseas
248,173
202,523
22.5
553,642
512,606
8.0
- domestic
61,602
31,712
94.3
142,710
85,344
67.2
Beverage
436,541
244,198
78.8
1,021,765
636,632
60.5
Total
746,316
478,433
56.0
1,718,117
1,234,582
39.2
80.496.398.8125.1158.9233.5244.2236.5238.9346.3436.501002003004005001Q112Q113Q114Q111Q122Q123Q124Q121Q132Q133Q13
In 3Q13, sales of beverage segment which comprised Garden Fresh bottled juices surged 78.8% to quarterly high of RMB436.5 million from RMB244.2 million in 3Q12 due to strong demand for the expanded range of juices including loquat and mixed loquat juices and further expansion of retail points in the PRC market. The strong performance reflected the success of the trade exhibition held during last week of March 2013 in Chengdu, Sichuan Province PRC (?Chengdu Trade Exhibition?) as announced in April 2013. The Group announced on 15 April 2013 that it had secured multiple new distributors thus expanding its distribution network in the PRC market further as well as sizeable indicative orders after participation at the Chengdu Trade Exhibition.
Optimistic Outlook
The Group continues its advertising and promotional efforts and has rolled out new commercials for Garden Fresh juices across TV and internet media platforms.
The Group?s sustained efforts in building brand value have also yielded positive results as evidenced by the growing brand recognition and awareness. On 27 September 2012, the Group announced that its wholly-owned subsidiary, Garden Fresh (Shenzhen) Fruit & Vegetable Beverage Co., Limited 鲜 绿 园 (深 圳 )果 疏 饮 料 有 限 公 司 has been accorded the prestigious ?Top 500 Asia Brand? award (?亚 洲 品 牌 500强 ?) during the eighth Asian Brand Ceremony held in Hong Kong. As announced on 7 November 2013, our in-house beverage brand鲜 绿 园 ® (?Garden Fresh?) has been valued at RMB3.5 billion (or approximately S$714 million based on exchange rate of S$1 = RMB4.90) according to a 品 牌 价 值 数 据 证 书 (?Brand Value Data Certificate?) issued by Asia Brand Association Experts Committee and Asia Brand Research Centre based on the analysis of 4 indicators and targets namely, brand performance in the market, growth potential in brand value, quality control and level of efficiency (?Brand Valuation Exercise?).
Given the continued success enjoyed by the Group?s two in-house brands in the PRC market, namely Garden Fresh juices as well as Grandness canned food products, the Group decided to seize new growth opportunities through leveraging its expanding customer base and distribution network in the PRC market.
On 11 October 2013, the Group announced that it has successfully launched a new in-house brand called 好 田 园 (?Hao Tian Yuan?) to market its latest range of snack food during a tradeshow held in Wuhan city, Hubei Province PRC (?Wuhan Tradeshow?). During the Wuhan Tradeshow, the Group introduced more than 20 stock-keeping units for its new range of Hao Tian Yuan snack food category. These new snack food products include dried mushroom, lotus seed, peanuts, raisins, anchovies and dates.
Barring unforeseen circumstances
Driven by higher orders across the board, especially that of own-branded products such as 鲜 绿 园 ® (?Garden Fresh?) juices from its beverage segment and 振 鹏 达 ® (?Grandness?) canned fruits from domestic canned products segment, net profit attributable to equity holders surged 99.0% to RMB168.1 million in 3Q13 compared to RMB84.5 million in the same period last year (?3Q12?). For the first nine months ended 30 September 2013 (?9M13?), net profit attributable to shareholders also jumped 52.4% to RMB341.7 million from RMB224.2 million in the same period a year ago (?9M12?).
On track to achieve record profit in FY2013
Mr Huang Yupeng 黄 育 鹏 , Chairman and CEO of Sino Grandness said, ?I am extremely pleased to report a positive set of results which reflected strong growth momentum across all business segments. In particular, our own-branded product segments continued to deliver exceptional growth, with sales of beverage and domestic canned products surging 78.8% and 94.3% respectively in 3Q13 driven by positive macro factors in the PRC market such as increased health awareness, growing demand for convenience food and beverage products and rising disposable income. As our first nine months net profit has already exceeded that of the full year 2012, barring unforeseen circumstances, we are on track to deliver record net profit for FY2013.?
Higher orders across the board
Revenue analysis by segments:
In 9M13, revenue of the Group increased by 39.2% to approximately RMB1,728.1 million from RMB1,234.6 million in 9M12. The increase in revenue was attributable to higher orders across the board. Sales of beverage segment which comprised Garden Fresh juices surged 60.5% in 9M13 to RMB1,021.8 million from RMB636.6 million in 9M12 due to further expansion of distribution network in the PRC market. The increase in revenue of overseas and domestic canned food products was mainly due to increased production capacities and higher orders from major customers in both overseas and PRC market
Strong Growth Momentum For Garden Fresh Bottled Juices Continued Into 3Q13
Garden Fresh juice sales in RMB million
3Q
9 months (9M)
Jul ?Sept 2013
Jul ? Sept 2012
Change
Jan ? Sept
2013
Jan ? Sept
2012
Change
Product segment
RMB?000
RMB?000
%
RMB?000
RMB?000
%
Canned products
- overseas
248,173
202,523
22.5
553,642
512,606
8.0
- domestic
61,602
31,712
94.3
142,710
85,344
67.2
Beverage
436,541
244,198
78.8
1,021,765
636,632
60.5
Total
746,316
478,433
56.0
1,718,117
1,234,582
39.2
80.496.398.8125.1158.9233.5244.2236.5238.9346.3436.501002003004005001Q112Q113Q114Q111Q122Q123Q124Q121Q132Q133Q13
In 3Q13, sales of beverage segment which comprised Garden Fresh bottled juices surged 78.8% to quarterly high of RMB436.5 million from RMB244.2 million in 3Q12 due to strong demand for the expanded range of juices including loquat and mixed loquat juices and further expansion of retail points in the PRC market. The strong performance reflected the success of the trade exhibition held during last week of March 2013 in Chengdu, Sichuan Province PRC (?Chengdu Trade Exhibition?) as announced in April 2013. The Group announced on 15 April 2013 that it had secured multiple new distributors thus expanding its distribution network in the PRC market further as well as sizeable indicative orders after participation at the Chengdu Trade Exhibition.
Optimistic Outlook
The Group continues its advertising and promotional efforts and has rolled out new commercials for Garden Fresh juices across TV and internet media platforms.
The Group?s sustained efforts in building brand value have also yielded positive results as evidenced by the growing brand recognition and awareness. On 27 September 2012, the Group announced that its wholly-owned subsidiary, Garden Fresh (Shenzhen) Fruit & Vegetable Beverage Co., Limited 鲜 绿 园 (深 圳 )果 疏 饮 料 有 限 公 司 has been accorded the prestigious ?Top 500 Asia Brand? award (?亚 洲 品 牌 500强 ?) during the eighth Asian Brand Ceremony held in Hong Kong. As announced on 7 November 2013, our in-house beverage brand鲜 绿 园 ® (?Garden Fresh?) has been valued at RMB3.5 billion (or approximately S$714 million based on exchange rate of S$1 = RMB4.90) according to a 品 牌 价 值 数 据 证 书 (?Brand Value Data Certificate?) issued by Asia Brand Association Experts Committee and Asia Brand Research Centre based on the analysis of 4 indicators and targets namely, brand performance in the market, growth potential in brand value, quality control and level of efficiency (?Brand Valuation Exercise?).
Given the continued success enjoyed by the Group?s two in-house brands in the PRC market, namely Garden Fresh juices as well as Grandness canned food products, the Group decided to seize new growth opportunities through leveraging its expanding customer base and distribution network in the PRC market.
On 11 October 2013, the Group announced that it has successfully launched a new in-house brand called 好 田 园 (?Hao Tian Yuan?) to market its latest range of snack food during a tradeshow held in Wuhan city, Hubei Province PRC (?Wuhan Tradeshow?). During the Wuhan Tradeshow, the Group introduced more than 20 stock-keeping units for its new range of Hao Tian Yuan snack food category. These new snack food products include dried mushroom, lotus seed, peanuts, raisins, anchovies and dates.
Barring unforeseen circumstances
Sinograndness is starting its move again.
Results will be out today after market close. Hence, this will be a featured stock to notice for investors.
Stay invested and have faith in it.
Regards,
George @ highgrowthinvestment.blogspot.sg
Sino Grandness is an integrated manufacturer and distributor of bottled juices as well as canned fruits and vegetables. Since its establishment in 1997, the Group has rapidly grown to become one of the leading exporters of canned asparagus, long beans and mushrooms from the PRC. The Group serves globally renowned customers across Europe, North America and Asia, such as Lidl, Rewe, Carrefour, Walmart, Huepeden, Coles and Metro.
It has been producing 4 years of good earnings and is still currently expanding its products.
Good analyst reports by UOBkayhian & Maybank Kim Eng.
Broke out of base recently at .075.
Quarterly results will be out on 14th Nov 2013.
Hence, this will be a stock to watch for at least 20% upside in the medium term.
Regards,
George @ http://highgrowthinvestment.blogspot.sg/