China Minzhong

China Minzhong: Maybank-KE maintains Buy with $1.16 TP. House visited Minzhong’s Tianjin king oyster mushroom farm last week. Management showed us the whole stack farming process. In view, this is a very important step towards the modernisation of the company’s agricultural operations and reducing its reliance on labour in the long run. Expect a more balanced revenue split, which would not only reduce default risks of European counterparties’ but also improve overall gross margins. House reiterate BUY call with an unchanged target price of $1.16 after the co visit. Rev recovery and account receivables are two points investors should look at in Minzhong’s FY12 results in two wks.