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Dunno whether true or not as i cannot find the news update in their website.
Singaporean SP Chemicals? US$1.2 billion petrochemical complex is set to come up in Hoa Tam ward in Vietnam?s central Phu Yen province where the local government has earmarked land for the project.
http://www.thanhniennews.com/business/?catid=2&newsid=28876
uobkh tp 1.68
dbs tp 1.55
cimb tp 1.75
+cci divergence means bottoming soon, any TA expert to comment?
CIMB-GK report:
We expect SP Chemicals to report sterling 4Q06 EPS growth of 61%yoy as its ASPs remained firm against earlier anticipation of a decline. FY07 is looking brighter, on expected steady demand with some new customers locked in. A new capex budget of Rmb280m for FY08 should increase its capacity by 50% in 1Q08. We have raised our FY06-08 EPS forecasts by 4-72%, after assuming higher ASP assumptions and margins, and accretion from the aggressive 2008 expansion. Valuations are compelling at 4.8x CY07 P/E and 2.7x CY08 P/Es, against a projected 3-year EPS CAGR of 42%.
SP Chemicals warrants a higher valuation and we have raised our target price to $1.08 (6.5x CY07 P/E) from $0.80 (5.5x CY07 P/E). This still puts it at a 50% discount to the13x commanded by another well-managed company, Jiutian Chemical.
"We remain impressed with management, which has put in place at least one new growth driver every year," said analyst Kerryn Tay from CIMB-GK.
"The company has also earned a track record of resilient margins and good execution," she added.
Tay said that 2007 is "looking brighter", as SP Chemicals could potentially supply chlorine to seven new customers and lower oil prices should help cut cost.
Thanks for the info :-)
I'm not a guru... just like to use TA for analysis. For this counter, its volume is relatively low. The trend is a little uncertain ... but slightly more likely to go upwards than southward.
DBSV said it has upgraded its rating to "buy" from a "hold" and increased its target price to $0.80 from $0.59 given the stock's attractive valuations.
"A higher utilization rate, energy cost savings from the Co-Gen plant and anticipated lower benzene costs derived from lower oil prices bode well for the group," DBSV said in a client note.
The brokerage has revised upwards its 2006 and 2007 net profit forecasts for the firm 23.7% and 38% to RMB233.7m mln and RMB290.6m, respectively.
"Valuations are attractive as the stock is only trading at 4.8x and 3.9x 2006 and 2007 forecast PE," it said.
Electricity accounts for 22% of SP Chemicals' COGS. And China has raised electricity price by an average of Rmb2.5cents/ kwh. Hence, the new co-gen plant, which started operations in May, will bring in cost savings and improve its competitiveness and efficiency.
Selling prices of caustic soda and chlorine have been severely hit by the rapid expansion in capacity in China. Selling price of caustic soda has collapsed 25% yoy in 1H06 while chlorine's has plunged by more than 40% yoy. However, there are signs of recovery in their selling prices after Jun 06 as rising electricity price reined in capacity expansion. A pick-up in demand will drive up prices or at least keep them stable.
UOBKH remains very positive on SP Chemicals as recovering selling prices and the co-gen plant stabilise margins. The added capacity in caustic soda, chlorine and aniline and improving utilisation rate should result in higher sales in 2H06. They have lowered their DCF-based target price from $0.89 to $0.85 to incorporate a higher discount rate for the stock's poor liquidity. The new target price is still attractive at 5.3x FY06 EPS and 4.5x FY07 EPS.