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2009-4-28 11:59:00 a.m. HKT, XFNA
DJ MARKET TALK: Techtronic Bounces 4.1%;Citi Doubles Target Price
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| 1148 [Dow Jones] Techtronic (0669.HK) rebounds 4.1% to HK$4.06 after 2-day, nearly 20% selloff on concerns of heavy dilution following convertible bond issue; volume modest though at HK$62.4 million, 10-day moving average at HK$4.44 distant. Citigroup says while CB to cause 7%-8% EPS dilution in FY10-11, it also removes group's near-term refinancing risks; despite revenue uncertainties in 2009, management targets gross, operating margin improvement; absence of restructuring/relocation charges should drive sharp earnings recovery this year. Citi doubles Techtronic target price to HK$7.80 from HK$3.90 on higher target P/E of 9.3X vs 5.3X previously; adds, 9.3X P/E still represents over 50% discount to current valuation of Black & Decker (BDK); keeps at Buy.(RLI) Contact us in Hong Kong. 852 2802 7002; MarketTalk@dowjones.com
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(Delayed by 1 hour)
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