[ET Net News Agency, 5 May 2015] Deutsche Bank raised its target price for Tongda Group
(00698) to HK$1.6 from HK$1.53, and maintained its "buy" rating.
Despite weak China smartphone demand, Tongda's preliminary 1Q sales posted strong YoY
growth and tracked 5% ahead of DB's estimate, driven by strong smartphone casing orders
from Huawei/Xiaomi as well as an ASP increase in air conditioner casings (from Haier),
said the research house.
In light of strong metal casing orders from Huawei and Oppo, Tongda plans to expand CNC
machine capacity to 1500 units by year-end (versus 200-300 units in 2014). DB expects
Tongda's handset casing sales to post 40% YoY growth, which would lead to GPM expansion
and 44% YoY EPS growth in 2015. (KL)
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