CIMB upgrades China Fishery Group (B0Z.SG) to Outperform from Neutral, says FY10 net profit of US$116.5 million (+24% on-year) below forecast, represents 87% of FY10 estimate; says shortfall due to lower trawling revenue, poorer-than-expected anchovy catch in Peru. 

“Nevertheless, we raise our FY11-12 EPS estimates by 4%-7% on improved operating assumptions and lower interest expense.” On back of earnings upgrade, upside potential from expansion plans, raises target price to $2.55 (based on 12.5X CY12 P/E, 20% premium to peer average of 10.2X), from $1.75. Says catalysts include announcements of earnings-accretive expansion, and higher fish and/or fishmeal prices. 

 

Shares flat at $2.18.