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2009-4-22 09:28:00 a.m. HKT, XFNA
DJ MARKET TALK: MS Raises Tingyi Target To HK$10.80 From HK$10
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| 0916 [Dow Jones] STOCK CALL: Morgan Stanley raises Tingyi (Cayman Islands) (0322.HK) target price to HK$10.80 from HK$10.00 after 2008 net profit +33.7% at US$260 million, topping house's, consensus' forecasts by 3%, 6%. Notes sales +33%, gross margin +59 bps on-year as stronger noodle sales offset weaker beverage sales. Raises FY09-10 EPS forecasts 4.7%, 3.8%, but tips 2009 earnings upside risk from potentially better margins in noodle business, lower palm oil price as earnings highly sensitive; estimates every 10% palm-oil-price fall boosts earnings by 10%; notes palm oil price down 50% vs June-July peak. Keeps at Overweight on relatively defensive nature, views noodle dominance as strong anchor to help defend leadership position in more-competitive beverage space. Says strong distribution network is key competitive advantage. Shares closed flat at HK$9.39. (LES) Contact us in Hong Kong. 852 2802 7002; MarketTalk@dowjones.com
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(Delayed by 1 hour)
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