China Fishery (CFG)

China Fishery (CFG): Deutsche initiates Buy with $2.60 target, based on 11x FYSep11 PE. Notes integrated commercial fisher mainly a valuation play; large discount to global peers (40%), and to Chinese peers (70%) is unwarranted, given CFG’s scale. Group has 20% share of Pollock in Russia, 17% share in South Pacific (Jack Mackerel) and Peru (Anchovy)…

Expects the following catalysts to drive the stock re-rating, i) acquisition of more fishing quotas in Russia sometime 1Q11, ii) reversal of start up costs n the South Pacific, iii) continued geographical and fish product expansion, iv) rising fish prices underpinned by population gains, higher living standards and demand for aquaculture.