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KGI keeps 'outperform' on China Sunsine with higher target price on higher ASPs and sales volumes

Felicia Tan
Felicia Tan5/24/2021 05:22 PM GMT+08  • 2 min read
KGI keeps 'outperform' on China Sunsine with higher target price on higher ASPs and sales volumes
Shares in China Sunsine closed 1.5 cents higher or 2.9% up at 53 cents on May 24.
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KGI Research analyst Chen Guangzhi has maintained “outperform” on China Sunsine with a higher target price of 68 cents from 53 cents previously, as the company could see a turnaround in profitability in the FY2021, thanks to the upcycle in commodity prices and capacity ramp-up.

That said, Chen says average selling prices (ASPs) for rubber chemicals could fall in the 2HFY2021, although China Sunsine’s higher productivity in insoluble Sulphur and anti-oxidant is expect to offset the potentially weaker price later in the year.

In addition, Chen is positive on the company’s management vision, which led to a “well-timed ramp-up of capacity”. The ramp-up in capacity helped provide a buffer against the cyclical downturn, he says in a May 20 report.

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