Ziwo Holdings

Ziwo Holdings: +7.7% at over 5-wk high of $0.28 with stronger 2Q10 earnings supportive. Net profit +12.2% on-year at CNY32.4m, with higher sales volume, selling prices offsetting increased raw material costs. Growth on quarter even stronger at 66.2%. CIMB has Buy call with $0.35 target. Expects raw material expenses to remain volatile but says Ziwo able to keep passing on costs to customers; positive outlook for demand in 2H10 coupled with the gradual ramp-up of production capacity should allow 2H10 performance to better first half’s. Ziwo supplies foamed materials used for making interior lining of cars, shoe soles, sportswear.