Sino Grandnes has broke above the 1.42 resistance yesterday which it has been consolidating below since 11 June 2013. At yesterday closing price, has also staged a breakout above the 20 DAY MA convincingly. Next resistance to watch is 1.50. A break above 1.50 can see it go to 1.60 quickly which was the high set in May. Looks set to test this critical level again on the positive IPO news of its beverage business. Immediate support at 1.45 then 1.42. A break above 1.60 can see it find a new high and consolidation phase before pushing up further.
Stop loss at 1.44 for short term trades
Announcement yesterday
The Board of Directors of Sino Grandness Food Industry Group Ltd (“the Company”) wishes to announce that the Company is proposing to spin-off its beverage business segment ("Proposed Spin-off) under its wholly-owned foreign subsidiary, Garden Fresh (HK) Fruit & Vegetable Beverage Co., Limited (“Garden Fresh”) together with its group of subsidiaries for a listing on an internationally recognised stock exchange ( the “Proposed Listing”) with an accompanying initial public offering of shares (“IPO”).
Maybank KE – 2 JULY 2013
Sino Grandness: Big Uncertainty Removed; Maintain Buy TP $1.89
Ø Sino Grandness announced yesterday that it has obtained a no-objection letter from SGX for the proposed Garden Fresh spinoff. It is an important milestone that we have been waiting for. We are more confident about a successful Garden Fresh IPO than before, thus we change our valuation methodology to SOTP. Our target price is raised to SGD1.89 accordingly. Maintain BUY.
Ø Garden Fresh IPO is likely to launch in the next twelve months and we are optimistic on an at least mid-teen FY13 IPO PER.
Ø Assuming a successful Garden Fresh IPO and parent company Sino Grandness selling some vendor shares, some special dividends can also be expected in FY14.
Ø Sino Grandness announced yesterday that it has obtained a no-objection letter from SGX for the proposed Garden Fresh spinoff. It is an important milestone that we have been waiting for. We are more confident about a successful Garden Fresh IPO than before, thus we change our valuation methodology to SOTP. Our target price is raised to SGD1.89 accordingly. Maintain BUY.
Ø Garden Fresh IPO is likely to launch in the next twelve months and we are optimistic on an at least mid-teen FY13 IPO PER.
Ø Assuming a successful Garden Fresh IPO and parent company Sino Grandness selling some vendor shares, some special dividends can also be expected in FY14.
OCBC – 2nd July 2013
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