Kim Eng Securities starts China Animal Healthcare (EP4.SG) at Buy with $0.48 target, pegged at 15X FY11 P/E. Says recent approval from China for company to start commercial production, sale of animal foot-and-mouth disease vaccines should underpin earnings growth in medium term; “the animal drug sector in China holds promise of significant growth, buoyed by increasing meat consumption and a higher penetration rate of animal drugs.”

Says company’s multi-brand strategy effective as it provides access to many different retailers in any one town or area in China. Says recent entry of private equity group Blackstone as strategic investor is “strong endorsement” of company’s long-term growth prospects. 

 

Shares +2.8% at $0.365.