China Fishery

China Fishery: Annouced strong 3Q11 results which was in-line.

Rev at US$190m, +19.2% yoy and +3.3% qoq, while net profit at US$37.4m, +5% yoy and -18.2% qoq.

Strong rev boosted by grp’s Peruvian fishmeal operations, which accounted for 42.3% of total rev and rose 79.6% to US$80.5m as a result of an 80% increase in sales vol of fishmeal and oil. Rev from trawling operations, benefited from increased contribution from factory vessel fleet, which increased by 193.9% to US$19.7m following moves by Grp to maximise utilisation of fleet by deploying 2 fishing vessels to South Pacific.

Going forward, grp confident of prospects, and expect 4Q11 to see higher inventory of fishmeal and fish oil convert to improve rev despite 4Q011 not being a fishing season in Peru. Tip contributions from Peruvian fishmeal operations to continue to grow, supported by strong demand for fishmeal in the PRC. Valuations compelling, with Grp trading at an annualized 7.3x FY11E P/E vs historical average of 13x.