China Minzhong: signs Rmb 151m of new farmland lease agreements totaling 15.2k mu comprising:
i) 10k mu in Jiangxi Province,
ii) 5k mu in Fujian Province, and
iii) 0.2k mu in Shanghai. This translates to a land price of Rmb 990/mu per yr, consistent with mgt’s previous guidance on land lease of Rmb 900 - 1000/mu per yr.
The Company will also build a new, comprehensive (eg. air-drying, freeze-drying, fresh-packing, brining and canning) processing factory in Putian, Fujian for Rmb 51m…
Move reflects Minzhong’s good execution as well as ability to source for and lock in new farmland leases in order to implement its planting plans and growth strategies.
The latest batch of new farmland is also likely to be in time for the upcoming planting season in 3QCY11 (1QFY12), with earnings contribution to kick in as early as FY12…
JPM maintains Overweight with TP $2. Expects upcoming 3QFY11 results to be strong due to the pushing back of key product - champignon mushrooms sale into the quarter due to the late arrival of winter in 2010.
Macquarie keeps at Outperform with TP $2.20. Pips Minzhong as top pick amongst the listed China Ag plays due to quality corp governance and strong sh/h structure.
Stock trades at 8.2x /6.2x CY11E/12E P/E (~35% premium to China Green, but at ~40% discount to Le Gaga).
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