Mon 16 Oct 2006
Straits Times Index: 2,669.55 (+2.87)
Volume: 1,161.1 million
Rises/ Falls: 302/ 317
China Printing and Dyeing (ChinaPDye) - $0.370 (+0.005)
The bull run in Singapore stock market continue today with the Straits Times Index closed at a fresh high of 2669.55.
Shares of China Printing and Dyeing Holding Limited traded to a high of 0.385 before retreating to close unchanged at 0.370 on top volume of 42 million shares.
Kim Eng Securities has initiated coverage of China Printing & Dyeing Holding Limited with a “buy” recommendation and a target price of $0.510 based on a blended valuation approach using price-earning (PE) ratio and Discounted cash flow (DCF). The brokerage projects China Printing & Dyeing’s earnings per share (EPS) to show a 26.5 percent compounded annual growth rate (CAGR) over the next three years, with return on equity (ROE) projected at 20 pct.
“Despite a short history, earnings have grown impressively in 2004-05 due to extensive overseas contacts and major shareholders’ strong support for R&D. With a strong pipeline of new products, we expect China Printing to be able to maintain its good track record. It has also identified potential acquisition targets that will give it new capabilities as well as enter new markets.” Kim Eng said. The brokerage expects the demand for printing and dyeing to be sustainable as more textile companies relocate to China and textile diversity in form and function rises.
Kim Eng forecasts China Printing & Dyeing will post 83.4 mln yuan in net profit this year from 70.3 mln last year. It sees net profit expanding further to 110.5 mln yuan in 2007 and to 142.2 mln yuan in 2008.
Price chart of China Printing shows that near term resistance is at 0.400, which is the opening price on its first trading day on the Singapore Stock Exchange.
