CIMB in a Dec 13 research report says: "We earlier warned that CXLX's ambitious plans for a fourth and fifth plant and coal-mine acquisition could mean imminent cash calls. This has changed with the entry of a new strategic investor, Primavera Capital, and a handy US$51 million for expansion.
"By combining Primavera Capital's substantial experience in capital markets and CXLX's strengths in operations, we believe operating efficiencies can be enhanced, leading to a substantial improvement in the group's competitive edges and the robust growth of its businesses.
"While earnings are unchanged, our target price has been lifted as we roll over to a lower 5.5x CY13 P/E (from 7x, still at 50% disc. to larger peers, reflecting the compression in peers' valuations). UPGRADE TO OUTPERFORM."
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