LONDON (SHARECAST) - Analysts at Seymour Pierce have today issued a bullish note on Asian Citrus, highlighting both the 'very encouraging' 8.7% rise seen in net profits, to RMB629.1m, as well as the 'pleasing' 30% increase in the company´s final dividend payment, for a yield of 5.2 per cent.
Also, the house broker calls attention to the fact that management have said that they are looking into ways by which the execution of the mandated HK$250m buy back program can be improved.
As well, while the company´s outlook notes the slowing Chinese economy, which may result in a modest, if any, rise in orange prices, the poor winter harvest expected should see some rise by the end of 2012.
Furthermore the broker has a positive view of the firm´s pursuit of synergistic benefits from the vertical integration into the fruit processing business. This, given the long term growth in fruit consumption, which is expected to be driven by the consumption of processed rather than fresh fruit, makes it of strategic importance.
These analysts believe that investors will be encouraged by the results. So, given that the company is trading on a historic price-to-earnings (PE) multiple of just 6.6x (earnings per share (EPS) of RMB0.52/5.07p) and a prospective PE of 5.9x, Seymour Pierce has decided to maintain its BUY recommendation and 50p target price.