Fufeng Group (
HKG:0546) is the world's largest producer of MSG, xanthan gum and a major supplier for a series of bio-fermentation products. The main products of the Group are food additives, animal nutrition, colloid and high-end amino acids. In fiscal 2016, Fufeng generated sales of approximately RMB11.2 billion and profit attributable to shareholders of about RMB1.09 billion. For more information, please visit our website www.fufeng-group.com
Fufeng's FY09 net profit rose 215% YoY to Rmb928mil, 6% and 9% above market consensus and our expectation, respectively. We raise our FY10E-11E earnings estimates by 12%-20% on higher sales volume assumptions, which could offset the impact of lower ASPs and profit margins.
Fufeng Group Limited ("Fufeng" or "the Company", together with its subsidiaries collectively known as "the Group"; HKG:0546), a leading vertically integrated manufacturer of corn-based biochemical products in China, today announces its record high annual results for the year ended 31 December 2009.
Fufeng Group Limited (HKG:0546), a leading vertically integrated manufacturer of corn-based biochemical products in China, today announced that Fufeng has been selected as a constituent of Hang Seng Composite Index (HSCI), effective 8 March 2010.
ABN Newswire stocks to watch today include: Galaxy Resources Limited (ASX:GXY) (PINK:GALXF), Otto Energy Limited (ASX:OEL), Australian Bauxite Limited (ASX:ABZ), Coalspur Mines Limited (ASX:CPL) (PINK:CSPZF), Havilah Resources NL (ASX:HAV) and Fufeng (HKG:0546) (OTC:FFNGY).
Piper Jaffray Asia Securities Limited has rated Fufeng (HKG:0546) at "Overweight" and has raised its target price from HK $5.00 to HK $6.00 with the improved earnings estimates. Piper Jaffray Asia Securities Limited revised up its FY09E-11E earnings estimates by 10%-11%, as the securities had increased the ASP assumptions for MSG for 4Q09E and FY10E by 6% and 6%, respectively.
The previous analysis in different dimensions including degree of production concentration, strength of industry barrier and the business model lead a conclusion that there are now clearly recognisable tiers in China's glutamic acid & MSG industry. Fufeng stands out of its peers.
China's urbanization and economic development have procured the flourishing development of the food industry and the catering industry. As one of the invisible champions in the background, the glutamic acid and MSG industry has also grown stably. China is the new centre of the worldwide glutamic acid and MSG industry. Its vast market provides a good platform for the industry. On this foundation, this report aims to probe into the important issues of the existing layout and "two stabilities" in the industry.
Sauces & Condiments industry is the "hidden champion" behind food processing and catering industries and the biggest slice of it is the market for taste- enhancing condiments. Monosodium Glutamate (MSG), being the representative of taste-enhancing condiments, thus has a very important position.
ABN Newswire stocks to watch today include: Stirling Resources (ASX:SRE), Monarch Gold (ASX:MON)(PINK:MARCF), Conquest Mining Limited (ASX:CQT)(PINK:CQMLF), Conquest Mining Limited (ASX:CQT)(PINK:CQMLF) and Fufeng (HKG:0546)(PINK:FFNGY).
SBI E2-Capital maintained Fufeng (HKG:0546) rating at 'buy', and set its target price at 5.98 Hong Kong dollars. SBI E2-Capital estimated Fufeng will record RMB 915.3 million in 2009.
