BUY Guangdong Kelon Electrical Holdings GK Goh Research has initiated coverage of the mainland-based manufacturer of refrigerators and electrical appliances with a 'trading buy', citing the company's strong earnings growth. Analyst Graham Ormerod expected annual growth of 7 per cent in the refrigerator market over the next five years. The market for air conditioners, meanwhile, was forecast to grow between 10 and 20 per cent annually in the coming two years. The growth story aside, Mr Ormerod said Guangdong Kelon was enjoying rising margins as the company's production costs fall. 'Currently, the gross profit margin for its fridges is about 27 per cent,' he said. '[Air conditioners] yield a gross profit margin of about 16 per cent.' Mr Ormerod expected Guangdong Kelon's net profit to double to 173 million yuan (HK$163.05 million) this year. BUY Sinotrans VC CEF Brokerage has assigned a 'buy' rating, citing strong growth prospects for the mainland logistics provider. While the H-share index has climbed 44.6 per cent and red chip index 13.2 per cent since Sinotrans' initial public offer in February, its shares have gained just 11.9 per cent over the same period. VC CEF said: 'This is undeserved given Sinotrans' solid fundamentals'. It cited a 15 per cent compounded annual growth rate in the two years through next year and cash holdings of $1.30 per share. VC CEF was upbeat on the company's express courier Sinoair, which accounted for 55 per cent of earnings. 'Once the express private mail market - currently a protected market for China Post - is liberalised, we expect Sinoair to become a key player,' the brokerage said. It has a price target of $3.10. BUY Cosco Pacific JP Morgan has maintained its 'overweight' recommendation on the container leasing and port operator, citing potential earnings upside from strong container demand. With China exports growing 32.6 per cent year on year for last month, analyst Benjamin Lo said the downside risk remained low. Cosco's Kwai Chung port reported an 11.4 per cent throughput decline compared with last year. 'In our view, this highlights Shenzhen's increasing competitiveness and the importance for Cosco to continue acquiring China port assets,' Mr Lo said. He believed a share price range of $9.50 to $9.95 based on a 15 times forward earnings was achievable.