BUY Ngai Lik Industrial DBS Vickers Securities has initiated coverage on the consumer electronics maker with a 'buy' recommendation, despite its reliance on cost savings for growth and dependence on a single customer, Wal-Mart Stores. Analyst Charles Law said Ngai Lik was 'renowned for its superb cost controls and timeliness in delivering on sizeable orders'. Ngai Lik plans to move production to Qingyuan, where labour costs are lower than its present location in Dongguan. Mr Law said the company's present valuation was distorted by its motorcycle division, which was a drag on the group. 'A full write-off is rather unlikely ... a possible off-loading of the division will provide a positive catalyst to the share price,' he said. He has a price target of $3.10. BUY Next Media SBI E2-Capital has reinitiated coverage with a 'buy' rating and expects earnings to rise on the back of its Taiwan operation. Analyst Clement Wong said: 'Given the steady circulation [of its Hong Kong publications] and stable retail prices, the Hong Kong operation will be a strong and reliable financial source for Next Media's regional expansion.' Meanwhile, the Taiwan operation appeared to be doing well, too. Taiwan Next Magazine broke even in May and Taiwan Apple Daily had a solid circulation of 350,000 readers as of last month, just one month after its launch. Mr Wong expected earnings to drop 56.1 per cent to 13.1 cents per share this year but climb 102.5 per cent to 26.5 cents next year. He has a fair value of $3.98 and expects the company to declare a dividend this year. BUY Cheung Kong (Holdings) Merrill Lynch has maintained its 'buy' call, saying the recent disposal of five malls to a real estate investment trust (reit) would enhance shareholders' return. Cheung Kong plans to sell five retail projects to Fortune Reit for $3 billion to $3.1 billion. Analyst Clifford Lam and Louisa Fok said: 'The transaction has effectively turned about $1 per share of Cheung Kong's non-Hutchison assets worth $15 into cash.' Despite the disposals, the analysts did not seem too optimistic about the property developer's earnings prospects. They estimated the company's earnings would drop 30.8 per cent to $2.65 per share this year and 22.2 per cent to $2.06 next year. They have a price target of $57.