Beijing Enterprises well on course to exceed forecasts
Beijing Enterprises Holdings Recommendation: Buy Brokerage: SBC Warburg BEIJING Enterprises is a mainland-backed conglomerate with interests including consumer products, transport infrastructure, tourism services and property investment.
The company recently reported pre-exceptional interim net profit of $200 million, well on track to exceed its prospectus forecast for the full year of $350 million.
Yanjing Beer was the key earnings booster with sales volume 20 per cent higher than expectations. The unit should continue to improve as the beer high season is the second half.
Shanghai Petrochemical Recommendation: Buy Brokerage: Salomon Brothers SHANGHAI Petrochemical operates a complex in Shanghai which processes crude oil into a broad range of synthetic fibres and plastics.
H-share chemical stocks have been volatile over the past few weeks due to the 15th Communist Party Congress but investors will now begin to refocus on fundamentals.
Shanghai Petrochemical should be favoured as this year should mark the cyclical trough for its earnings with 19 per cent per-share growth expected next year.
Aeon Credit Service (Asia) Recommendation: Buy Brokerage: Nikko Research Center FINANCIAL services company Aeon reported interim results below forecasts due to a lower than expected increase in new cardholders, but overall asset quality improved.
Earnings forecasts have been slightly downgraded for the next two years, but net profit should still grow at a healthy average of 50.1 per cent over the next three years.
Competition in the credit-card market is becoming fierce, but the company should continue to prosper due to its niche position.
Tak Sing Alliance Recommendation: Buy Brokerage: Pacific Challenge Securities TAK Sing designs and distributes casual wear, operates restaurants, and invests in Hong Kong and mainland property.
The company's garment division continues to perform well with its Squeeze brand name increasing market share in the United States last year, while its major property development project, Carianna Friendship Square in Shenzhen, is set to be a significant source of income in coming years.