Hong Kong, Dec 17, 2009 (ABN Newswire) - SBI E2-Capital maintained Fufeng (HKG:0546)(PINK:FFNGY) rating at 'buy', and set its target price at 5.98 Hong Kong dollars. SBI E2-Capital estimated Fufeng will record RMB 915.3 million in 2009.
Stronger-than-expected corn price and industry consolidation will be the growth momentum of Fufeng in the following several years, which MSG price surged from RMB7,719 per tonne in September 2009 to RMB10,200 in November 2009, according to the report.
The industry-wide gross margin has reached 35%+ with the fact that there is no mass capacity expansion from major glutamic acid producers, implying MSG supply will remain at present level in coming 10 months.
Fufeng's explosive earnings growth in short-term initially due to soft raw material costs this year and the high MSG price could extend into at least 1Q FY12/10F. Also, benefited from industry consolidation, Fufeng will likely have a larger market share and less earnings fluctuation.
SBI E2-Capital predicted the FY12/11 earnings will be at RMB1,066.8m compared with FY12/10F figure at RMB1,017.5m.
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About Fufeng Group Limited
Fufeng is one of the leading vertically integrated manufacturers of corn-based biochemical products principally utilizing fermentation technology in China. It is mainly engaged in production of MSG related products and xanthan gum. MSG products include MSG, glutamic acid, fertilizers, corn refined products, starch sweeteners, threonine, corn oil, branched-chain amino acid and chicken powder. Fufeng is the largest MSG and xanthan gum manufacturer in the world. For further information, please visit the Company website: www.fufeng-group.com .
Contact
Porda International (Finance) PR Company Limited Harriet Lau Tel: +852-3150-6761 / +852-9199-2965 Email: harriet.lau@pordafinance.com.hk
Alman Loong Tel: +852-3150-6731 / +852-9107-8225 Email: alman.loong@pordafinance.com.hk
Fufeng Group Limited
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