Wednesday, August 29, 2012
China Minzhong: CIMB downgrades to neutral from OutPerform and Cuts TP to $0.78 from $0.81. Note that 4Q12 net profit came in ahead of expectations, but house tweak estimates on housekeeping and lower TP, still pegged to the sector’s 3x P/E. House concerned that operating cash flow at Rmb359m makes up only 52% of earnings because of the lengthening of its receivables days. Mgt believes that credit quality is good and short-term liquidity needs should be covered by its approximately Rmb600m in undrawn credit facilities. Maybank Kim Eng however maintains Buy with $1.16 TP citing that sharp increase in receivables has improved and expect possible first div payments this yr.