Sino Grandness

Sino Grandness: Maybank-KE initiates with Buy Call and $1.60 TP, (The Highest in the street TP) implying a 64% upside potential. Sino Grandness is a stock with a very special catalyst, which is the listing of its beverage subsidiary Garden Fresh, which is a potential multi-bagger given the huge valuation mismatch, with the grp trading at just 4x P/E and peers in Hong Kong that trade at 20-30x earnings. Sino Grandness’s holding in Garden Fresh alone could potentially worth $360m in house base case scenario relative vs Sino Grandness’ market cap of $285m. Apart from the Garden Fresh spinoff catalyst, believe Sino Grandness is also a very good company at the operational level. It has seen profit growth of 63% p.a. since its IPO, mainly driven by its three-year old juice business and believe the best is yet to come. 4x earnings seems too cheap for a company with a forecasted profit growth of 20-30% over the next few years.