Stocks Today
Chinese-based Synear Food Holdings fell as much as 10.7 percent to S$0.375 with 9.7 million shares traded a day after the firm issued a profit guidance for its 2008 first-quarter earnings, dealers said. The frozen foods company said that a recent snowstorm in China was expected to cut its sales in the first quarter by up to 10 percent as compared to the same period in 2007.
The company said that sales would still be higher than what they were in the fourth quarter of 2007.
CIMB analyst Ho Choon Seng downgraded Synear’s investment rating to “underperform” from “trading sell” and cut its share target price to S$0.35 from S$0.77, citing poor near-term outlook and execution risks from the company’s aggressive expansion plans in China to capitalise on the upcoming Beijing Olympics.
My views: Synear’s price has dropped significantly recently from more than S$1.00 to its current price of about S$0.37 in a short period. Though its suffering from the snowstorm impact and rising inflation, I still expect a decent profit, perhaps, a diminishing profits in view of the China’s increasing inflation. Somehow, I disagree with CIMB’s investment ratings. I find synear to be a good company to hold over long term due to its strong financial backing. Most of the time, they are performing relative better than the industry. I am looking for further bargain around S$0.20-S$0.25.
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