Sino Grandness (technical)

Sino Grandness: UOB Kay Hian maintains BUY with a higher target price of $1.66. House expect its beverage segment to achieve a higher profit of Rmb230m that will result in a lower dilution from CB holders. TP assumes the listing to go through in 2014, assuming a holding company discount of 20% to SGF’s GF stake and a 5.0x 2014F PE valuation for its remaining businesses. Houseforecast sales from the Garden Fresh segment to grow to Rmb1.4b from Rmb873m in 2012 due to stronger demand and a wider distribution network. The co has also introduced a new soft-pack and tin-can loquat juice that we believe will broaden the target market, catering more to school children and young adults. Technically, the stock is trading near its potential immediate resistance at $1.30. Prefer the stock to be well supported above $1.20 for further upside towards $1.50.