Synear   

Won Olympics sponsorship deal

It was affected by the rise pork prices in China recently and corrected to less than $2. Noticed that it has gone up in the last 2 days. I hope the worst is over for Synear.

 

Hi Brother JezzTan,

Thanks for your information, this is time for shopping to counter ... Wish all of you luck and happiness with this pork and frozen food.

 

Hi techsys,

Hope these two articles will be of some help to you and those vested:

Synear
6 Jun 07
1) Merrill comments :

Synear is witnessing higher pork and flour costs but is countering the situation by raising ASP (5-8%). As such, management remains optimistic in maintaining its profit margins and market share especially when competitors like SanQuan and LongFeng are also increasing their prices.

At 18xFY08E PE, Synear trades at 35% discount to its HK-listed consumer F&B peers. maintains BUY target $2.65

2) Taken from UOB KAYHIAN


Pork price & new regulation of frozen food

Recently the price of the company has fluctuated tremendously. We
believe there could be two reasons for the fluctuation, the rising pork
price and the new regulation of frozen food. However, we do not believe
those two items would affect the company's sales and profit margin.

Rising pork price. Despite the rising pork retail price has gone up 50%
in some areas in China, the cost of pork purchased by the company in
Zhengzhou has just gone up by 20% recently. And the pork price only
accounted for approximately 15% to 20% of the overall cost of raw
materials and the cost of raw materials account for approximately 85% of
the overall cost of sales. Therefore, the pork cost accounts for 12.75%
to 17% of the total COGS. In addition, the flour price has also gone
up by around 5% while the other raw material prices have been stable.
The company expects that the overall cost of raw material price will
increase by 5% in 2007. Thus, the company has already started to adjust
sales price for some products since late April. The company intends to
finish the entire adjustment process for all products by end-June.
Furthermore, some competitors, such as Sanquan and Longfeng, have also
started raise sales price. Therefore, we believe the rising pork price
would not have a significant impact on the company.

New regulation of frozen food. In addition, the Ministry of Commerce has
issued a revised "Frozen food industry standard" to restrict the
supermarkets from selling frozen dumpling in bulk, effective on July
1st.
The company provides products in packages, from 450g to 880g, and also
5kg. These big packets will be sold either to restaurants or to
supermarkets which will in turn sell in bulk to the consumers. The
company has invented small packets, from 180g to 260 g. Based on the
research, some consumers would like to try different tastes of
dumplings, so they would like to purchase the products in small
quantities but more varieties or flavors.
The company believes small packet products will be replacing the big
packet product without negative impact on the sales volume or gross
profit margin. And the company believes it is a good opportunity to
improve its market shares from those regional players. We believe the
restriction of selling frozen dumplings in bulk would help the company
to build its brand name and to increase its market share.

Maintain BUY. Currently we believe those two effects do not have
significant negative impact on the company. We maintain our Buy call on
the company with a target price of S$2.40.

Cheers!!!

 

Hi brothers,

Any reasons why does this counter is shrinking?  Where is the destination of current movement?

 

This counter has a good movement ... really charming.  Always gives me money ...

 

Hi guys, good time to buy synear now, it has good potential to rise in the coming months and the olympics next year.  Those who want to make a good profit, BUY NOW.  All this pig problem not a big problem.  This will be solved sooner or later.  They are more into frozen food other than pigs.  UOBkayhian has still a buy rating on the stock TP 2.40.  Cheers.

 

Hehehe ..... Synear having a good short squeezing time .....

 

Synear and China Energy like to go opposite izzit?

 

Why Synear and China Energy recovering nicely ?

 

I think is BG is doing it. I think we can follow at 1.67 is a good buy since somebody also buy at 1.9 and still holding.

 

Bought at 1.90 months ago. Went up to 2.10 plus and didn't sell. Now big hole in my pocket. I think it is more than pork price. BB are pushing it down to buy in later.

 

is 1.72 a good  buy?

 

Traders are perturbed by escalating pork prices in China. "This will eat into Synear's profit margin," said a dealer.

 

UOBKH has upgrade target price to $2.35 from $1.60.



Some notes:

a) Capacity expansion is on schedule, with the land acquisition exercise for the Chengdu and Huzhou plants having been completed,

b) positive feedback was received during our market survey and more distributors have been contracted, and

c) margin is unlikely to be badly affected by the recent rise in raw material costs. Thus, there is a high chance Synear will meet our FY06 forecasts.    



Hong Kong-listed branded consumer plays are trading at 30x FY07 PE, over 40% higher than Synear's 21x. In terms of PEG, Synear's 0.7x is more attractive than its Hong Kong peers' 1.4x. As Synear is also a market leader in the segment, the valuation gap should narrow gradually. Current market sentiment is favourable to the consumer sector too.      



Given Synears's good progress in capacity expansion and strong market presence, we believe Synear's risks have been reduced on completion of its expansion exercise and continued strong sales growth. Hence, we lower our assumption for cost of equity from 14.3% to 12.3% in our DCF valuation. Based on our target price, the valuation of 26x FY07 PE and 0.9x PEG is reasonable. Major risks include a lower-than-expected utilisation rate and irrational competition.

 

Finally it break 2. vested

 

It rose to a record of $1.70 after Merrill Lynch said an emerging convenience food culture in China will drive demand for its products.



Analyst Eddie Loh from Merrill Lynch initiated a "buy" rating and a target price of $2.05.



"We believe the Chinese market will continue to expand, as the society shifts towards a convenient food culture," said Loh, who estimated that Synear leads with a 15 to 20% market share of the frozen food business in China.



Loh said that the per capita consumption of six kg of quick-freeze food in China still lags the average 20 kg in developed economies.

 

Rose on 'fund orders' with a 10m married deal at $1.51, supposedly going to an institution.



This spurred a rally in Hsu Fu Chi's shares.

 

all time high @ 154 with vol 21.127m. vested

 

i went in last week @ 1.43, keeping it til next year

 

be cautious on this one.... the trend is unclear.