Sunvic: AmFraser initiates at Buy with $1.02 target, based on 6x FY10E P/E. Says the co’s two main products, acrylic acid (AA) and acrylate esters (AE), which are the basic ingredients for a wide range of consumer goods, are seeing growing demand, particularly from China. Notes Sunvic is poised for rapid earnings growth, via its new upstream venture into propylene and AA pdtn capacity expansion plans….
The new propylene plant is expected to commence pdtn by end 1Q11, allowing Sunvic to secure its key raw material and potentially expand margins; while phase 1 of its new AA plant (currently under construction) is expected to become operational in 2012, boosting pdtn capacity by 80% to 365k tpa.
On technicals, house advises traders to watch the $0.70 resistance level, which if broken could lead to further upside.
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