Analysts say Buy BUY Buy

Today DBS Vickers Securities has issued a BUY call on China Fishery and SC Global. Here are the details:

China Fishery Group
Let's go fishing
BUY S$2.16 Price Target : 12-Month S$ 3.02 (Prev S$ 3.08)

Story: China Fishery (CFG) reported a good set of numbers for 2Q and 1H07. Topline for 2Q grew 233% to US$110.5m, aided by its newly added 3rd and 4th Vessel Operating Agreements (VOAs) in Jan and contribution from its Peruvian fishmeal operations. Net profit for 2Q grew 77% to US$20.2m.

Point: The Group's net profit at half time was an impressive 56% increase to US$51.6m, but was somewhat below our expectations. This is because our previous forecast assumed that the Group would change its 4th VOA to a prepayment term, similar to the previous three VOAs. At the current stage, this seems unlikely to materialise in 2007; and, we are now factoring in the daily charter expenses instead of an amortisation charge. In addition, we are also factoring in contribution from the redeployment of two elongated vessels in 2008 in the South Pacific Ocean. The net effect is that we adjust our net profit forecast down by 15% for FY07F and a 2% for FY08F.

Relevance: We remain positive on the Group's prospects, and believe it is well positioned to take advantage of the increasing global demand for fishery products, underpinned by limited fish resources and its increased size of operations. Maintain BUY, TP: S$3.02 based on 12x FY08F earnings.


SC Global Developments (SCGD SP)2Q07 results in line
S$5.55 BUY Price Target: S$ 7.80

Revenue declined 32% y-o-y to S$34.0m mainly due to lower progressive sales recognition of its residential projects. Contribution from its associate, AVJennings Limited, grew 66% y-o-y to S$2.9m. Net profit declined 35% y-o-y to S$5.3m. However, excluding the one-time gain of S$5.3m from the sale of an investment property at Mohammed Sultan Road in 2Q06, net profit would have increased approximately 89% y-o-y. A special interim dividend of 7cents (less 18% tax) was declared for the first time. It is intended that the approved Scrip Dividend Scheme would apply to such dividend and SC Global intends to utilise its balance Section 44A credits to frank the payment of the proposed dividends. A share split of every existing share into two ordinary shares is proposed and this is expected to enhance
the liquidity and affordability of its shares. With the expected increase in
market interest and activity in the shares, this would make it more attractive to a wider pool of investors.

Disclaimer: All shares recommendations in this Blog are my personal opinion. Readers are encouraged to do their own research before investing. Remember, it’s your own money! I will not be liable for any losses incurred.