Sino Grandness: DBSV initiates coverage with Buy Call and $0.60 TP. Tip Beverage manufacturing to drive growth over the next two yrs. Given the firm demand for its beverages in 4Q10, believe that beverage sales should turn in strong results for FY11F. Fair value of $0.60 is based on 6x FY11E P/E….
Believe rerating for the stock hinges on its ability to penetrate the China beverage market and deliver better-than-expected results. House forecast a topline growth of 44% for the beverage business, contributing 33% of the Grp’s revenue. Risk to forecast is the rate of grp’s penetration rate of its beverage business across China.
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