Sino Grandness

Sino Grandness: As Sino Grandness is in the midst of preparing for a separate listing of their fruit and vegetable juice business (Garden Fresh) by 2014 (either in HK or Taiwan), Lim & Tan does a comparative valuation with similar co’s listed in HK/ Taiwan, based on grp’s consensus earnings, which street expects to rise 34% in 2013 to Rmb329m and about 50% of it is derived from Garden Fresh, translating to Rmb165m. While much bigger in size than Sino Grandness, comparable co’s such as Uni President, Tingyi and Want Want are all trading at an average P/E of 25x 2013 earnings. Assuming we take a 60% discount (10x PE) due to its smaller size, Garden Fresh alone would command a market cap of $330m ($1.24 per share) vs Sino Grandness’ current market cap of $228m ($0.86). Sino Grandness’ current market value of $228m is only valuing the entire co at 3.5x 2013 earnings. While its share price has risen a significant 72% since Dec 12 and is currently at its all time listing high, its continued low 2013 valuation suggests that if the co is successful in listing Garden Fresh in 2014, it remains cheap even at this level.