Ziwo Holdings

Ziwo Holdings: CIMB reiterates Buy with $0.43 TP. Note that since obtaining approval from Taiwan Financial Supervisory Commission for the listing of up to 71.2m TDRs on Taiwan Stock Exchange, Ziwo’s share price has creeping up steadily, recording a 18% gain in the span of 12 trading days….

Add that further capacity expansion will drive growth. Following its IPO in Oct09, Ziwo has utilised the proceeds to install additional capacities for its key products such as high foamed PE, foamed SBR, foamed EVA and 30D TFY. In Nov10, the Group unveiled yet another plan to ramp up its production capacity; announcing the acquisition of a vacant plot of land together with plans to build four new foamed SBR production lines on this plot land which would boost total production capacity....

We note that grp has a healthy balance sheet with Net cash per share at 70.9 RMB cts (13.9 scts) as at 30Sep10, with total borrowings remaining at zero. Grp continues to generate healthy cash flows from its business in 2010, with operating cash flows coming in at Rmb81.8m for 9M11.