China Fishery Group (S$1.49) - Improving efficiency of fishmeal operations China Fishery has announced the acquisition of its eighth fishmeal plant for US$19.9m. The new plant with a steam-dried fishmeal processing capacity of 110 tonnes/hour is located in the central-southern part of Peru, complementing its existing fishmeal processing plants along the northern coast.
The new plant is expected to improve overall efficiency as it would allow the company's fishing vessels harvesting in nearby waters to dislodge their catch quickly and return to the fishing grounds. However, we maintain our EPS estimates for now as the ability to procure anchovies and not processing capacity is the critical factor. Maintain Outperform. The company continues to trade at a discount to our unchanged target price of S$3.30, still based on 14.0x CY09 P/E, in line with the industry’s normal trading band.
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