JPMorgan starts China Minzhong at Overweight with $1.45 target price, believes company is well positioned in China's fragmented vegetable cultivation, processing sector given its diversified product range, cost advantage stemming from integrated operations, stable repeat customer base & working relationships with government and suppliers. As an integrated processier, the group is able to supply both processed and fresh vegetables to customers.
Expects net profit growth of 21% to Rmb338m in FY10 & 27% to Rmb429m in FY11 putting the stock on 8.8x FY10 and 7x FY11 P/Es.
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