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Mechanization of the agricultural sector
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davecsh
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09-Dec-2007 19:58
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Anyone care to comment the fundamental and potential of this stock? |
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zhuge_liang
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21-Apr-2007 01:05
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China Farm Equipment, which makes harvesters, ploughs and diesel engines, aims to be the leading farm equipment maker in central and southern China in 5 years and expects state subsidies to farmers will lift sales. China Farm , which currently has about an 8-10% share of the farm equipment market in China, plans to expand its production capacity to meet the demands of one of the world's largest agricultural economies. "Our target is that in the first five years, we want to be No.1 in central and southern China -- that's where the rice-producing areas are," CEO Wang Shu Ping told Reuters in an interview on Friday. "Then, in the following 5 years, we hope to be No.1 in China, in terms of sales of farm equipment," Wang added. In a bid to quell social discontent, China has pledged to lift spending on its countryside in '07. As part of the plan, China plans to increase direct subsidies to farmers for seeds and farming equipment. The total budget will rise by 15.7% in 2007, reaching 4.65 trillion yuan, China's Ministry of Finance said in March. Wang, who grew up in China's Hunan province as a rice farmer, said he wants to improve the livelihood of the millions of farmers in China. "I understand the farmers' sufferings well," said Wang, a graduate with a degree in electronic automation. "With the machines, you don't have to bend your back anymore. One plough machine is equivalent to the work of 40 cows and 40 people." China Farm, which has a stock market value of about US$121 million, was founded in '01 as a private firm selling diesel engines. In '03, it branched out into the farm equipment business. Later, it acquired 2 ailing state-owned firms, both manufacturers of diesel engines. Farm equipment now accounts for about 70%of China Farm's revenue, while diesel engines account for the rest. Hunan-based China Farm plans to expand into Vietnam, Indonesia, Thailand, Laos and Cambodia, which Yeap said is "a sensible and natural move," as the firm does not want to be too susceptible to the seasonal nature of the Chinese farming business. Yeap said he hopes to increase the firm's overseas sales from 5% of total revenue to more than 20% over the next 2 years. Yeap expects net profit to rise 30% in FY07, falling short of analysts' forecasts. Analysts from DMG and Kim Eng had predicted that the firm would generate full-year net profit of 70 million yuan and 73 million yuan -- or a rise of 40% and 46% from the previous year -- respectively. "I want to be more conservative," Yeap said. "To grow in that manner, I would need to keep on finding new markets. That would take time and would not be that simple. "But organically, we can achieve that 30%," he added. The firm is in talks with truck and tractor manufacturers -- all state-owned -- about possible acquisitions, Yeap said, but he declined to give details. China Farm's shares, sold at $0.345 apiece in the IPO earlier this year, nearly tripled on their first day of trading in Feb. |
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LemonTea
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15-Feb-2007 09:25
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Singapore-listed China Farm rated 'buy', target 1.11 sgd - DMG
DMG & Partners Securities has started covering China Farm Equipment Ltd with a "buy" rating and target price of 1.11 sgd, citing a robust outlook for the firm. "China Farm Equipment manufactures harvesting and ploughing machineries for the farms at a time when the Chinese government is actively promoting the agricultural sector," DMG said in a note. "Organic growth opportunities are excellent, supplemented by the production of diesel engines and the prospects of exports." The brokerage estimates China Farm Equipment's net profit will grow at a compounded annual growth rate of 31 pct from 2005 to 2008. It expects the firm's net income to rise to 70 mln yuan this year from 50.1 mln (proforma figures) last year, and further to 81.1 mln yuan in 2008. "Valuation is attractive, given its earnings growth prospects," DMG said. |
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zhuge_liang
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09-Feb-2007 21:16
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It nearly tripled from its IPO price of $0.345 on its trading debut as investors were attracted to its strong growth potential, said dealers. DMG initiated coverage with a "buy" rating and target price of $1.11, estimating that China Farm's net profit would grow at a CAGR of 31% from 2005 to 2008. "China Farm Equipment manufactures harvesting and ploughing machineries for the farms at a time when the Chinese government is actively promoting the agricultural sector," DMG said in a client note. |
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