S$0.505-SIGR.SI
We understand that the company will be releasing its 2Q 2011 results in early Aug 2011 compared to last year’s mid-Aug 2010.
We believe that the company’s 2Q 2011 performance will again be robust, likely exceeding street estimates on the back of better than expected traction in its beverage division as it accelerates it expansion into hypermarts in China such as Walmart, Carrefour, Jusco, Tesco and Vanguard.
New product introduction is helping demand as the company launched new product such as ice loquat juice, following its huge success with the initial loquat juice debut late last year.
As demand continues to outstrip supply, the company is in the midst of setting up a new production line to double production capacity.
The canned vegetable exports is also beginning to pick up as they enter the seasonally stronger periods of the year and this year will see stronger bottomline contributions from its new Australian market as it will not be subject to anti-dumping tariff of 25%.
Since early this year, the company’s Founder and Chairman Mr Huang YP has bought back 200,000 shares from the market around the 47-48 cents level, raising his stake to 44.37% of the company. While not much, it is likely to have helped the stock price stay above those levels during the stock market fallout from the Japanese earthquake early this year and recently during the Eurozone debt crisis.
Looking back at the last 4 quarterly results releases, we note that trading interests typically rises ahead of its results releases and with its upcoming results likely to again be robust and with the street still remaining upbeat with average consensus buy target price of between 68-79 cents, we too are maintaining our BUY recommendation ahead of its results release (since early this year, the stock has been range bound in the 45-60 cents range).
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