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China Minzhong
Alliance With Indofood
Indofood comes! China Minzhong announced issue of 98m new
shares by way of private placement to Indofood Sukses Makmur Tbk, a
leading Indonesian packaged food producer, at SGD0.915 per share.
The new shares will represent 14.95% of total shares outstanding
following the placement. Upon the completion of the deal, Indofood will
surpass GIC becoming the biggest shareholder of Minzhong.
The alliance with Indofood should benefit Minzhong. Indofood is a
leading packaged food producer in Indonesia. With the support from
this strategic shareholder, Minzhong could not only expand its revenue
by supplying raw materials to Indofood, but also leverage on Indofood’s
distribution network to march into fast-growing Southeast Asia market.
Upgrade earnings forecast. We raise our revenue and net profit
forecast for the next three years on the back of the potential synergies
generated from the deal. Despite the dilution in EPS due to the
enlarged share base, we believe China Minzhong can leverage on
Indofood’s strength and experiences to accelerate its growth thus offset
the dilution effect and protect minority shareholders’ interest.
15% control might not be the end of the story. Indofood’s acuqitision
track records shows that it usually prefers to controlling the majority of
the targeted companies. Thus we suspect that 15% stake in China
Minzhong is probably not the end for Indofood. In our view it is highly
possible that in the future Indofood will acquire more shares in open
market or from other big shareholders such as GIC through another
placement. We even cannot rule out the possibility of a privatisation
offer by Indofood some day in the future.
Maintain BUY and raise TP. We continue to like China Minzhong for
its prosperous growth outlook and undemanding valuation. Better use
of the proceeds from the placement would be a catalyst for the stock.
We still believe some dividends payment in FY13 is possible. At current
low PE multiple, even a small payout ratio could give an attractive
dividends yield.
Maintain BUY with target price SGD1.36, pegged to 5x
FY6/14 PER.
Maybank Kim Eng Research
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You're most welcome!
Isolator ( Date: 18-Feb-2013 11:03) Posted:
Thank you.... I love it...... lol
Peter_Pan ( Date: 18-Feb-2013 10:54) Posted:
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Fool
Isolator ( Date: 18-Feb-2013 10:00) Posted:
Call me a fool.... I like it..... We should always remind ourselves on how not to be a fool..... tips for you.... lol
fortunecat ( Date: 18-Feb-2013 08:48) Posted:
try calling your friends, colleagues or just anyone as a fool, see if they find it offensive or not lol.
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ChinaMinzhong: Alliance With Indofood Buy TP $1.36 - Maybank Kim Eng
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Crude Palm Oil Ends Down as Malaysia Sets 4.5% CPO Export TaxMalaysia announcing it will raise export taxes on crude palm-oil shipments in March sent futures on Malaysia’s derivatives exchange lower Friday. The benchmark April contract at Bursa Malaysia Derivatives ended 0.4% lower at 2,486 ringgit a metric ton after moving in a MYR2,476-MYR2,521/ton range. In a circular issued Friday the government said it will set CPO export duties at 4.5% in March after two consecutive months of no duties that boosted crude shipments from Malaysia and helped to ease stockpiles. Data from cargo surveyor Intertek Agri Services showed that crude shipments have doubled in the first 15 days of February to 229,610 tons as a result of an export-tax advantage Malaysian exporters had over top producer Indonesia. Overall Feb. 1-15 shipments rose 18% from the previous month to 673,555 tons, Intertek said. Another surveyor, SGS (Malaysia) Bhd., pegged shipments for the period at 649,045 tons–up 14%. Indonesia set February CPO duties at 9% from 7.5% previously. " CPO exports in March are likely to be much lower due to the 4.5% tax rate and Indian importers have bought quite a fair bit in January. Palm oil port stocks at Indian ports are also filing up–so we expect buying to slow down soon," said Chandran Sinnasamy, head trader at Kuala Lumpur-based LT International. Palm oil's bearish technical cues and improving crop weather in parts of Argentina and Brazil added to the weaker tone in palm oil. Palm oil is a direct substitute of soy oil. " Palm oil values have traded in the MYR2,217-MYR2,615/ton range the past four months and bullish traders failed to take prices past MYR2,615/ton for the technical landscape to turn convincingly bullish. Therefore, I believe prices are poised to ease back to MYR2,400/ton in the short term," Mr. Sinnasamy said. In the cash market refined palm olein for February was offered at $850/ton while cash CPO for prompt shipment was offered at MYR2440/ton. Open interest on the BMD was 170,163 lots versus 174,821 lots Thursday. One lot is equivalent to 25 tons. A total of 28,733 lots of CPO were traded versus 20,263 lots Thursday. |
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Time of Lifting of Trading Halt:
1100 hours
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EZION SECURES A CONTRACT WITH AN APPROXIMATE VALUE OF USD 79.9 MILLION OVER A 3 YEAR PERIOD WITH ADDITIONAL 2 YEAR EXTENDABLE OPTION TO PROVIDE A JACK-UP RIG TO SUPPORT A SOUTH ASIAN BASED NATIONAL OIL COMPANY
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April gold down 1.7% at $1,607 after $1,596.70 low
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April gold down 1.7% at $1,607 after $1,596.70 low
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Regional Plantation: Inventory level down marginally to 2.58m tonnes. Expect larger drawdown in inventory in Feb 13 on low production and higher exports. Inventory level drops marginally to 2.58m tonnes. Inventory level dropped 1.9% mom but grew 27.7% yoy due to CPO production dropping by 10% mom as it was the commencement of the low production season. This is slightly above our expectation of 2.5m tonnes and at the higher end of market expectation. Nevertheless, as compared with the previous year, CPO production was up 24.4% yoy due to the strong yield recovery from the water stress in 1H12. Exports to remain strong. Exports continue to be good at 1.62m tonnes (-1.6% mom, +17.1% yoy) in Jan 13 with strong imports by Pakistan and the US with 14.4% mom and 16.4% mom respectively. We expect exports to increase in the coming months as the winter season comes to an end. According to Societe Generale de Surveillance, palm oil exports increased by 25% mom to 429,070 tonnes during 1-10 Feb 13 with growth mainly coming from EU (+137.1% mom), the US (+33.2% mom), India (+21.4% mom) and China (+20.9% mom). Maintain UNDERWEIGHT. Plantation stocks are expected to underperform the market when CPO price trades sideways. SELL IOI Corporation (IOI MK/SELL/Target: RM4.45), Golden Agri-Resources (GGR SP/SELL/Target: S$0.62), Genting Plantation (GENP MK/SELL/Target: RM6.60) and IJM Plantation (IJMP MK/SELL/Target: RM2.40).
UOB Kay Hian
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Icahn, Ackman fight over Herbalife takes center stage again FridayFebruary 15, 2013, 10:13 AM The battle of hedge fund heavies Bill Ackman and Carl Icahn over Herbalife will be center stage again Friday when Icahn appears on CNBC at noon. Thursday afternoon, Icahn revealed what his long position — and monstrous bet against Ackman — really is: Icahn owns 14 million Herbalife shares, or a nearly 13% stake in the diet supplements firm, a regulatory filing showed.
MUST WATCH! |
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Cultivating strong sales
Two consecutive quarters of strong sales bode well for China Minzhong,
ahead of its peak season. At 47% of our FY13 estimate and 44% of
consensus numbers, 1H convincingly beat our expectations, thanks to
surprisingly strong yields from new farmland.
2QFY13 earnings amounted to 28%
of our full-year forecast. We raise
FY13-15 EPS by 7-9% to incorporate
1H’s strength. Our target price is
raised for the higher earnings and a
higher CY14 P/E of 4x on par with
the sector (previously 3x) as the
sector re-rates. We upgrade it from
Neutral to Outperform, with the key
catalyst being the potential payment
of dividends later this year, given its
increased cash.
1H12 highlights
Strong cultivation sales driven by a
higher-than-expected yield for new
farmland that began seeding two
quarters ago are responsible for most
of the earnings outperformance.
Processed sales also contributed,
with export orders increasing, but
had a lesser impact.
Although processed gross margins
are lower yoy, the upward trajectory
since 4Q12 suggests that the worst is
over for export sales. The slight dip
in fresh margins was brought about
by a different product mix due to
new farmland.
Expenses were well controlled but
earnings rose less than sales because
of a spike in depreciation and
amortisation due to 1) depreciation
charge for the Putian Industrial Park
kicking in and 2) new farmland that
began seeding in 2HFY12.
Improving cash position
1H13 operating cash flow came in at
Rmb578.3m, much higher than the
Rmb337m earnings due to prompt
collection of 2Q sales. As a result, net
gearing fell to 5% from 15% at
end-FY12.
Upgrade to Outperform
We estimate Rmb550m of free cash
flow this year on the back of around
Rmb1.1bn of operating cash flow and
management’s capex guidance of
Rmb550m. Should a modest 20% of
earnings be paid out, CY13 yields
would be a strong 6%.
Outperform Target S$1.35
CIMB
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For reference.
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CHINA MINZHONG
S$1.02-CMIN.SI
2Q to Dec ’13 profit rose 24% yoy to Rmb216mln,
bringing 1H to Dec ’13 profit up 26% to Rmb337mln,
accounting for 44% of consensus full year estimate of
Rmb759mln.
This is about 10% higher than their usual 40/60 split
and at yesterday’s briefing, management had attributed
this to the early start to the winter season versus last
year’s relatively later start.
The key positive takeaway from this set of result is
the robust operating cash flow which surged 335%
yoy to Rmb578mln as most of the overdue receivables
were collected back, helping to allay concerns of bad
debt provisions.
As a result, cash position rose significantly from
Rmb42mln to Rmb442mln. Debts total Rmb650mln
against shareholders funds of Rmb3.93bln.
Looking ahead, management remains optimistic of
prospects citing the continued robust demand for
higher valued vegetable crops such as black fungus,
king oyster mushrooms and organic vegetables as well
as their more normal crops such as champignon
mushrooms, German chives and capsicums.
The 3-fold increase in processing capacity at their new
plant is expected to be phased in starting in the middle
of this year and is expected to be completed by the
end of the year. Another 20-25% of new cultivation
land is expected to reach maturity this year which
would continue to support growth of the fresh
produce.
Capex of Rmb550mln for the rest of the year is
expected to be funded internally.
Management also hinted of declaring a maiden final
dividend (although the exact amount has not been
decided) when full year results (to June’13) are
announced sometime in Aug ’13.
This should continue to sustain interest in the S-Chip.
We are expecting 15% growth in profit to
Rmb782mln for full year ending June’13, translating
to an undemanding forward PE of 3.6x.
Upgrade to BUY.
Lim & %Tan Securities
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WASHINGTON (MarketWatch) -- The University of Michigan-Thomson Reuters consumer-sentiment gauge rose to a preliminary February reading of 76.3 -- the highest level since November -- from a final January reading of 73.8, reports said Friday. Economists polled by MarketWatch had expected a February reading of 75, due to higher stock prices, though there are also negative factors, such as ongoing fiscal uncertainty, and higher payroll taxes and gas prices. The gauge increased in January after plunging in December, when consumers were worried about the fiscal cliff. The sentiment gauge, which covers how consumers view their personal finances as well as business and buying conditions, averaged about 87 in the year before the most recent recession.
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Feb. UMich consumer-sentiment gauge rises to 76.3
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LEADING INDONESIAN PACKAGED FOOD PRODUCER ACQUIRES 14.95% STAKE IN CHINA MINZHONG
Singapore, 15 February 2013 – China Minzhong Food Corporation Limited (中 国 闽 中 食 品 有
限 公 司 ) (“China Minzhong” or “Company” and together with its subsidiaries, the “Group”)
(SGX: K2N.SI Bloomberg quote: MINZ SP), today announces the allotment and issue of
98,000,000 new ordinary shares in the Company (“New Shares”) to PT Indofood Sukses
Makmur Tbk (IDX : INDF) (the “Subscriber” or “Indofood”) at S$0.915 per New Share (the
“Subscription Price”) (the “Proposed Subscription”).
The Subscriber is a company incorporated in Indonesia and is listed on the Indonesia Stock
Exchange. Indofood’s and its subsidiaries’ (“Subscriber Group”) operation ranges from the
production of raw materials and their processing through to consumer products in the market.
Their business activities can be classified into four complementary Strategic Business Groups,
namely:
(a) Consumer Branded Products Group, which is led by PT Indofood CBP Sukses Makmur
Tbk (" ICBP" ), a company incorporated in Indonesia and listed on the Indonesia Stock
Exchange. ICBP is one of the leading packaged food producers in Indonesia, producing
a wide range of packaged food products including noodles, dairy products, food2
seasonings, snack foods as well as nutrition and special foods for infants and children
and milk products for expectant and lactating mothers
(b) Bogasari Group, which is primarily a producer of wheat flour and pasta
(c) Agribusiness Group, which is led by Indofood Agri Resources Ltd, a company
incorporated in Singapore and listed on the Singapore Exchange Securities Trading
Limited (“SGX-ST”). The Agribusiness Group is a vertically integrated and diversified
agribusiness group that engages in the business of oil palm plantations and edible oil
and fats. In addition, the Agribusiness Group is also involved in the cultivation and
processing of rubber and sugar cane as well as other crops and
(d) Distribution Group, which covers the distribution of the majority of the Subscriber
Group's consumer products as well as third party products.
The Subscription Price represents a discount of 9.93% over the weighted average price of the
Company’s shares of S$1.0159 for trades done on the SGX-ST for the full market day on 14
February 2013. The New Shares will represent approximately 14.95% of the issued and paidup share capital of the Company immediately following the completion of the Proposed
Subscription. The net proceeds of approximately S$85 million will be used for the Company’s
planned expansion of its industrialised farming operations and the balance thereof will be
used as general working capital.
Commenting on this, the Group’s Executive Chairman and CEO, Mr. Lin Guo Rong (林 国 荣 )
said, “We are pleased to attract the keen interest from our new shareholder. With Indofood’s
long-standing track record in the food industry and China Minzhong’s experience in
agriculture and food processing, there are a lot of potential synergies between our businesses
such as strategic cooperation in supply chain and product distribution in the fast moving
markets of China and Indonesia. Our strongholds in different geographical regions and
product segments will open the door to new business opportunities and we look forward to3
leveraging on each other’s strengths and experiences to broaden our market exposure in the
future.”
China Minzhong recently announced its 2QFY2013 financial results, reporting a 23.6% rise in
net profit to RMB215.8 million, on the back of a 32.3% increase in revenue to RMB860.9
million. This was underpinned by improved performances across both the Group’s Cultivation
and Processed business segments.
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NEW YORK (MarketWatch) -- U.S. stocks opened slightly higher on Friday after encouraging manufacturing data from the New York region. The Dow Jones Industrial Average DJIA +0.08% rose 10.60 points, or 0.1%, to 13,984 and the S& P 500 indexSPX +0.07% gained 1 point, or 0.1%, to 1,522. The Nasdaq Composite index COMP +0.05%rose 3 points, or 0.1%, to 3,201.
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WASHINGTON (MarketWatch) - Industrial production slipped in January on declines in manufacturing and mining output, after the Federal Reserve found the final two months of last year were stronger than initially estimated. Industrial production slipped 0.1% in January, the Fed said, after gains of 1.4% in November and 0.4% in December. The Fed had initially estimated gains of 1% in November and 0.3% in December. Economists polled by MarketWatch had forecast a 0.2% pick-up in January output. Capacity utilization also fell in January, to 79.1% from an upwardly revised 79.3% in December.
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WASHINGTON (MarketWatch) -- The Empire State manufacturing index moved into positive territory for the first time since July, the New York Federal Reserve Bank said Friday. The index rose to 10.0 in February from a negative 7.8 in the prior month. Economists polled by MarketWatch expected the index to stay in contractionary territory at negative 2.0 in February. Details of the report were mainly positive. The key new orders sub-index jumped to 13.3 from negative 7.2 and shipments also rose sharply. Labor market conditions were mixed. An index of expectations of activity six months ahead rose to its highest level since April.
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