CGS-CIMB starts Jiutian Chemical Group at 'add' with TP of 14.5 cents on DMF cyclical upswing

CGS-CIMB Research has initiated coverage on Jiutian Chemical Group with an “add” call and a target price of 14.5 cents, as the brokerage sees the company riding on the dimethylformamide (DMF) cyclical upswing.

The target price, according to analysts Lim Siew Khee, Ong Khang Chuen and Kenneth Tan, is pegged to 5.7 times FY2022 price-to-earnings (P/E), and at a 20% discount to SGX-listed peer China Sunsine.

According to Jiutian’s management, the company is currently China’s second-largest DMF producer, with an annual production capacity of 150,000 tonnes as at 3QFY2020.