Sino-Grandness

Sino-Grandness: Reported very strong set of 3Q results, beating estimates, with Rev at Rmb191.8m, +49.9%YoY, while Net Profit at Rmb38.7m, +53.6%YoY. Strong performance driven by surging orders frm grp’s new higher margin beverage business, and higher sales across all product segments. Overall, gross profit margin declined to 30.8% from 33.6%YoY, partly due to lower average ASP for canned vegetables….

We note that result brings 9m10Rev to Rmb435.7m, +75.3%YoY and Net Profit to Rmb79.6m, +74.7%YoY, while 9mth10 EPS at 6.3c is already +13.3% vs FY09. Annualized EPS would place FY10 EPS at 9.46c, translating to an undemanding 4.4x FY10E P/E vs larger Peer China MinZhong who trades at 8.05x JunFY11 P/E and grp’s historical high of 6.5x P/E…

Going forward, Grp will expand its distribution network and development of new range of own branded beverage products, while also aiming to increase its rev income derived from China and its beverage business, which now contributes to 26% of grp’s rev.