Sound Global

Sound Global: JP Morgan upgrades from Neutral to Overweight and increases TP from $0.60 to $0.70 on brightening outlook on new rural BOT projects being awarded and likely removal of CB overhang in Sept 2012 when the put option comes into effect. The 12th Five Year plan on wastewater treatment sector has called for approx Rmb50b of invt in new plants during 2011-15. House believes that co is able to obtain 1.5% mkt share of these projects adding to already strong orderbook of Rmb2.7b. The put options on the convertible bonds shld come into effect on 15 Sept 2012 and is likely to be exercised because the bonds are alr trading near par in anticipation and current share price is 25% below conversion price of $0.684