Fufeng Group Limited Stock Market Press Releases and Company Profile

View in Other Languages Fufeng Group Limited (HKG:0546) High Margin Products Will Become New Growth Driver, A China Merchants Securities (CMS)(SHA:600999) Research Report 阜丰集团(HKG:0546)公布招商证券(SHA:600999)中报点评:高毛利率产品是未来新的业绩增长点 阜豐集團(HKG:0546)公佈招商證券(SHA:600999)中報點評:高毛利率產品是未來新的業績增長點 
Fufeng Group Limited (HKG:0546) High Margin Products Will Become New Growth Driver, A China Merchants Securities (CMS)(SHA:600999) Research Report
Fufeng Group Limited (HKG:0546) High Margin Products Will Become New Growth Driver, A China Merchants Securities (CMS)(SHA:600999) Research Report

Hong Kong, Aug 20, 2010 AEST (ABN Newswire) - Fufeng Group Limited (googlechartHKG:0546) (googlechartPINK:FFNGY) announced 2010 interim results. Sales up 45.4% yoy to RMB2.98Bn, profit attributable to equity holders up 30% yoy to RMB460Mn. EPS reached RMB0.32. The company proposed an interim-dividend of RMB0.11 per share. The Xanthan Gum segment reached 20% of total gross profit in 1H2010 and another high margin-product Threonine will become new growth driver in the future. We maintain our EPS estimate from 2010-2012 as RMB0.66, 0.88 and 1.11 respectively. We slightly revised up our TP to HK$10, based on 10X11PE and we reiterate buy rating of the stock.

Xanthan Gum accounted for 20% of the total gross profit

In 1H2010, the Xanthan Gum sales volume increased by 128% to 19086 tons, while the ASP is decreasing 8.5% yoy due to the company's strategy of market share expansion. The company targets 60% of global market share in the future.

Glutamic acid was internally used

The company's Glutamic acid sales only accounted for 3.2% of the total sales in 1H2010, as most of the glutamic acid was used internally in 1H2010. The company promotes Uo brand in 2009 and the products currently were sold in 2000 supermarkets.

Threonine will become new growth driver in the future

The company established 5000 tons of threonine product capacity in 1H2010, with the capacity to reach 10000 tons at the end of 2010. we believe the high margin product (GM reaches 30%) will become new growth driver in the future.

Valuation and rating

We maintain our EPS estimate from 2010-2012 as RMB0.66, 0.88 and 1.11 respectively. We slightly revised up our TP to HK$10, based on 10X11PE and we reiterate buy rating of the stock.
Financials-----------------------------------------------RMB mn       2008    2009  2010E  2011E   2012E-----------------------------------------------Revenue      3585    4633   6982   9168   11062Growth (%)    47%     29%    51%    31%     21%Net income    295     928   1099   1459    1851Growth (%)   554%    215%  18.4%    33%     27%EPS(yuan)    0.18    0.56   0.66   0.88    1.11P/E(X)       27.0     8.6    7.2    5.5     4.3ROE(%)        17%     39%    34%    33%     31%-----------------------------------------------Source: Company data, CMS (HK) estimates
For the complete China Merchants Securities (googlechartSHA:600999) Fufeng Research Report, please refer to the following Link below:
http://www.abnnewswire.net/media/en/docs/63560-CMS-1008-100819.pdf

About Fufeng Group Limited

Fufeng Group (HKG:0546)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

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Contact

Investors and media enquiries
Mr. Eric Yip / Ms. Janis Wong
Vision Asia Consulting Group Limited
Mobile: 852-96215918 / 852-64811607
Office tel: 852-23756669 / Fax: 852-35851606
Email: fufeng@visionasia.com.hk



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