XinRen: DBSV initiates Buy with $0.70 TP based on 7.6x FY11 P/E. Note that Grp is well positioned in the Chinese aluminium industry and that the Co. was profitable in the last 3 yrs despite the global financial crisis, while grp has been very cost competitive, providing them an edge over peers….
Highlight that Co. is undertaking plan to increase its exisiting fabrication capacity to 150,000 tonnes p.a by 2011, enabling grp to enjoy strong growth in the consumer-related industries in China….
TP represents a 40% discount to weighted average of worldwide peers, to take into account no equity ownership of smeling plants, potential risk of policy changes and 0 dividiends. TP suggests a 50% upside potential.