China Minzhong

China Minzhong: The grp attended CIMB’s APAC conference, where the key highlight was that the board is seriously considering paying dividends in FY13 but nothing is firm yet. It is possible that Minzhong will look to match Indofood’s 40% payout over time, although for now, an estimated 10% payout would translate to a yield of 2.2%. FY13 operating cash flow is guided to be about Rmb700m-800m The cultivation business rather than the processed business that will drive earnings, and to capitalise on this, CMZ will be ramping up industrialised farming facilities and is targeting to open three new facilities in Tianjin, Jiangsu and Sichuan. Indofood is likely to get a board seat but this tie-up will take time to yield significant impact on earnings. Supply contracts for the processed business can be achieved within six months but the potential JV to build cultivation facilities in Indonesia will take time.