Ng Fung Hong provides investors with food for thought
Ng Fung Hong Recommendation: Buy Brokerage: China Everbright Securities NG FUNG HONG distributes fresh, live and frozen foodstuffs imported from the mainland.
China Everbright's buy recommendation on the stock is based on its quality assets, focused business strategy and good financial management.
Ng Fung's supermarket division is adding 60 shops which the brokerage expects will bring further economies of scale.
Additional investments and further integration of the food-distribution and stock-raising divisions will enhance margins and boost earnings, with net profit expected to grow 26 per cent this year to $659 million.
Vanda Systems & Communications Holdings Recommendation: Hold Brokerage: Core Pacific-Yamaichi VANDA Systems is engaged mainly in computer systems integration, computer distribution, and telecommunications.
Core Pacific-Yamaichi estimates the company's operating profit margin will rebound to 1.9 per cent next financial year, taking into account plans to reduce operating costs by 20 per cent.
The brokerage believes that given the recent rally in technology stocks, Vanda may spin off its software operations, which would help improve the financial position of the company.
Vanda's gearing is estimated at 123 per cent.
International Bank of Asia Recommendation: Outperform Brokerage: DBS Securities IBA is a licensed bank in Hong Kong providing general banking, financial and insurance services.
DBS Securities placed an outperform recommendation on the stock after increasing its earnings projection for the company this year to $183 million, incorporating a lower forecast for non-performing loans.
The bank also is expected to accrue benefits from cost-cutting measures it introduced last year, which are expected to lower operating expenses by 11 per cent.