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KL Lo

Equity Bottom-Up

<p>Fufeng&rsquo;s FY14 result was weaker than market high expectation. Its net profit rose 24% YoY to Rmb626m on the back of margin expansion amid flattish revenue growth. I expect to see some near term headwinds but overall structural trend remains intact. In today analyst meeting, I found the stock is still under-covered by SELL side but it draws a lot of fund managers&rsquo; interest. Here are the key takeaways from the meeting.</p>

Fufeng&rsquo;s FY14 result was weaker than market high expectation. Its net profit rose 24% YoY to Rmb626m on the back of margin expansion amid flattish revenue growth. I expect to see some near term headwinds but overall structural trend remains intact. In today analyst meeting, I found the stock is still under-covered by SELL side but it draws a lot of fund managers&rsquo; interest. Here are the key takeaways from the meeting.

FY14 result below expectation, but structural story remains intact

<p>Fufeng is a leading Chinese manufacturer of corn-base biochemical products (e.g. MSG). MSG is widely used in the restaurant and catering industry. It is a small-mid cap name&nbsp;but with decent trading vol (Market cap at USD1.2bn and daily turnover of USD3m). I started looking at Fufeng as I believe it will benefit from falling corn price amid strong USD. After talking to company, I found it is not just a cyclical rebound but also an attractive re-rating story.</p>

Fufeng is a leading Chinese manufacturer of corn-base biochemical products (e.g. MSG). MSG is widely used in the restaurant and catering industry. It is a small-mid cap name&nbsp;but with decent trading vol (Market cap at USD1.2bn and daily turnover of USD3m). I started looking at Fufeng as I believe it will benefit from falling corn price amid strong USD. After talking to company, I found it is not just a cyclical rebound but also an attractive re-rating story.

Structural uptrend after years of consolidation

China

Fufeng Group Limited manufactures corn-based bio-chemical products utilizing fermentation technology. The Company's products include glutamic acid and xanthan gum.

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Fufeng (546 HK)

FY14 result below expectation, but structural story remains intact

Fufeng’s FY14 result was weaker than market high expectation. Its net profit rose 24% YoY to Rmb626m on the back of margin expansion amid flattish...

KL Lo

Structural uptrend after years of consolidation

Fufeng is a leading Chinese manufacturer of corn-base biochemical products (e.g. MSG). MSG is widely used in the restaurant and catering industry....

KL Lo

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