CIMB in an Apr 11 research report says: "Japan Foods has entered into a Production License Agreement with Shigemitsu Industry for the production of noodles to be used at its restaurants operated under the Shigemitsu Industry trademark. The Group has also negotiated for the exclusive rights to produce and sell Shigemitsu noodles in Singapore, Indonesia, Malaysia and Vietnam.
We continue to value JFOOD based on 7.4x CY13 EPS. This will result in a target price of 32 cents; with an upside of 44.9%, including dividend yield. Its CY12 dividend yield and CY12 return on equity is also higher versus its peers in CY12.
"We believe that it is trading cheap, at 5.3x CY13, below its 3-year historical forward P/E of 6.5x as well as its historical average P/B of 1.4x and backed by net cash per share of 9.4 cents in 1H12 or 41.0% of its current share price.
We continue to value JFOOD based on 7.4x CY13 EPS. This will result in a target price of 32 cents; with an upside of 44.9%, including dividend yield. Its CY12 dividend yield and CY12 return on equity is also higher versus its peers in CY12.
"We believe that it is trading cheap, at 5.3x CY13, below its 3-year historical forward P/E of 6.5x as well as its historical average P/B of 1.4x and backed by net cash per share of 9.4 cents in 1H12 or 41.0% of its current share price.
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