#3 Jiutian Chemical Group Limited
CGS CIMB has
initiated a BUY rating on the company with a target price of $0.145.
The favourable rating is due to it being the "world’s second-largest DMF producer". "As the only significant producer of DMF in Henan Province, Jiutian is well positioned to capture rising demand for DMF given the rapid industrialisation and urbanisation trend in Henan and neighbouring provinces."
This is coupled with " stronger ASPs riding on favourable industry dynamics." "According to Jiutian, many export-oriented countries have seen their manufacturing capacity take a beating in FY20 due to Covid-19 disruptions. This has resulted in general improvements in the export market for China’s manufacturers and in turn, higher demand for DMF." The potential increase in demand will bode well for Jiutian, especially because of its leader position in the industry.
>> Read more about the company here.
#4 GKE Corporation Limited
CGS CIMB has maintained a
BUY rating on the stock with a target price of $0.184.
The first reason is because of its strong results. "1HFY5/21 results above is expectations. GKE Corp's 1HFY5/21 net profit rose by 260% yoy to S$6.5m, above expectations at 72% of our full-year forecast."
Future growth is backed by "strong warehousing demand due to enhanced stockpiling. GKE’s warehouse is currently fully utilised due to enhanced stockpiling by some customers, and the company is looking to further optimise its customer base to focus on higher-yield tenants. "
>> Read more about the company here.
#5 Wilmar International Limited
Maybank Kim Eng has
maintained a rating of BUY and has increased its target price to $6.80.
The increased in target price is due to " better than expected operating environment where 4Q20 Chinese soybean crushing margins have increased 3x QoQ to reach the highest level since records began in 2015. The 30% 4Q20 rise in palm oil prices may drive upside surprise for WIL’s upstream business, while the recent changes to Indonesian palm oil export taxes should positively impact its refined palm oil exports."
Revenue from the automotive segment is likely to be better in 2H20 vs 1H20, as the automotive sales have picked up after the end of the global lockdown caused by COVID-19."
Another factor is o the listed subsidiary of Wilmar"90% Chinese subsidiary YKA (300999 CH, CNY129.80, NR) has risen 2.2x since its IPO in Oct 20. This means the parent is trading at a 75%
discount on SGX with its other regional businesses having no implied value.
The large valuation differential may catalyse further strategies to unlock value."
>> Read more about the company here.
#6 Innotek Limited
KGI has
initiated a BUY rating on the company with a target price of $0.73.
The main driver of the sentiment is due to " Stable outlook, that is supported by Chinese demand. InnoTek will see its businesses recover to near pre-pandemic levels, with a Chinese-driven tailwind for its automotive business."
Moreover, the impressive nature of the "twin turnarounds of the company, will aid the improvement
Apart from the restructuring back in2014/2015, InnoTek was able to manoeuvre around a weak COVID-induced 1Q20 performance and produce a resilient 2Q20 result that saw YoY performance improvement."
>> Read more about the company here.
#7 CapitaLand Retail China Trust
DBS has
maintained its buy rating on the company with a target price of $1.70.
The positive sentiments are because " China is leading the recovery post COVID-19. Green shoots
emerged within China’s retail sector in August as retail sales turned positive for the first time in 2020.
This should have translated to improvements in shopper footfall and tenant sales for CRCT. September retail sales growth was even stronger at 3.3% y-o-y, indicating that retail spending may have returned
with a vengeance in recent months"
>> Read more about the company here.