Continue reading this on our app for a better experience

Open in App
Home Capital Broker's Calls

Continue to 'add' China Sunsine as negatives priced in: CGS-CIMB

Jeffrey Tan
Jeffrey Tan • 1 min read
Continue to 'add' China Sunsine as negatives priced in: CGS-CIMB
CGS-CIMB Research has recommended investors to continue accumulating shares in China Sunsine Chemical Holdings despite the rubber chemicals producer’s poor half-year performance.
Font Resizer
Share to Whatsapp
Share to Facebook
Share to LinkedIn
Scroll to top
Follow us on Facebook and join our Telegram channel for the latest updates.

CGS-CIMB Research has recommended investors to continue accumulating shares in China Sunsine Chemical Holdings despite the rubber chemicals producer’s poor half-year performance.

The brokerage reckons that China Sunsine could do better ahead as it believes that the near-term challenging outlook for the company has been priced in.

“Potential re-rating catalyst is a recovery of Sunsine’s margin spreads,” CGS-CIMB analyst Ong Khang Chuen writes in a note dated Aug 13.

Moreover, CGS-CIMB believes that China Sunsine had likely gained market share in 1H20 by leveraging its superior product quality.

This is because smaller industry peers are operating at much lower utilisation rates, according to the company.

The brokerage notes that China Sunsine plans to further invest in capacity expansion to consolidate its market leadership position.

CGS-CIMB has kept its “add” call for the stock with an unchanged target price of 38 cents. Ong has also lowered the company's earnings per share (EPS) for FY20-22F by 10.9-11.6%.

As at 3.46 pm, China Sunsine was flat at 32 cents with 471,300 shares changed hands.

×
Loading next article...
The Edge Singapore
Download The Edge Singapore App
Google playApple store play
Keep updated
Follow our social media
© 2024 The Edge Publishing Pte Ltd. All rights reserved.