Combine Will (CWill): CIMB initiates at Buy with $0.50 target. Says ODM/OEM manufacturer of plastic and die-cast products likely to see strong ramp up in sales and earnings this year, driven by contributions from new customer for automatic soap dispensers. Notes CWill, which took 3 yrs to negotiate this deal, likely to secure good margins and volume allocation for the mass market pdt already on sale in the US, and slated for sale in Europe soon. Cites likelihood of higher dividend payouts this year, from the current HK5.8cts (~3.4% yield).
Tips proposed Korean duallisting as catalyst for share price, as it would improve valuations and help CWill penetrate into the Korean market. Notes Cwill will undergo a 10-to-1 consolidation exercise prior to the Korean listing…
Technically, we note that CWill share price has been rising on strong volume, and appears to be in a longer term uptrend. Nevertheless, the negative divergences in RSI, Stochastics vs share price suggest some caution. Near term support at $0.25, then $0.23. Resistance at $0.30.
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