TINGYI (Cayman Islands) manufactures, distributes and sells instant noodles, rice crackers and other food and beverages in China. Brokerage ABN Amro Hoare Govett Asia has just put a buy on the stock. Tingyi remains attractive for fundamental reasons as the company's Master Kang product is the top-selling instant noodle brand in China with a market share of 25 per cent. The launch of a new brand name - which targets the middle and low ends of the market - should strengthen its market position. Tingyi has an extensive distribution network in the mainland, covering about 1,300 wholesalers and 2,000 retailers. Strong brand-name recognition and distribution in China are allowing Tingyi to diversify into other food products such as biscuits and beverages which offer good long-term growth potential. The new businesses are likely to depress the overall earnings picture in the initial years. But the diversification into new areas is good for the company's development. Tingyi's valuation is attractive compared with other food and beverage companies in the region and for investors with a longer-term perspective it is now time to get in.
