Tuesday, November 16, 2010

Sound Global

Sound Global: 3Q earnings -53% YoY to Rmb60m owing to higher-than-expected new listing expense of Rmb60m in HK, slower-than-expected turnover growth and weaker-than-expected gross margin….

DMG maintain Buy, increasing TP to $1.05 from $0.93, expecting strong growth ahead. Remains confident of order books’ sustainability, trimmimg earnings downwards (-7.3% in FY10 and -4.6% in FY11) to factor in the higher effective tax rates and expenses. Cash invested into BOT projects will provide recurring steams of revenue….

However Citi maintain Sell, with $0.76 TP from $0.70, cite that 3Q results disappointed, cut earnings estimates by 6-14% in 2010-12F.

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