Stocks to Buy Now Aegis Capital Starts Pingtan Marine Enterprise (PME) at Buy; Top Player in High-Growth, High-Barrier Segment Breaking News Alerts from StreetInsider Top News July 9, 2014 8:58 AM EDT Get Alerts PME Hot Sheet Price: $2.39 -0.83% Rating Trend: Up Trade PME Now! Aegis Capital begins coverage on Pingtan Marine Enterprise Ltd. (Nasdaq: PME) with a Buy rating and price target of $15. Analyst Yi Chen commented, Pingtan Marine is a profitable Chinese distant water fishing company operating in the Arafura Sea in Indonesia and the Bay of Bengal in India. The company’s large 126-vessel fleet enables it to capture Chinese consumer-favored seafood and typically sell all products within three months of its shipment back to China. Pingtan Marine is tax-exempt for all its aquatic products sold and receives government subsidies based on the number of vessels it operates. The company commands the largest Chinese fleet in the Arafura Sea and competition is insignificant in this non-overfished region. Pingtan Marine is implementing the plan to increase its profit margin by forming a joint venture with China Co-op and vertically integrating into fish processing and selling to end markets. The seafood market in China has seen continuous growth in the past decade. Demand for naturally-produced healthy seafood in China would most likely exceed the supply for the foreseeable future. Pingtan Marine is poised to grow its revenue and profits at double-digit rate through organic growth, potential acquisitions, and obtaining permits in new fishing grounds. We expect the company to produce sustainable operating cash flows in the coming quarters. The estimated purchase price of a 150-foot fishing trawler in China is about $1mm and the average cost for a fishing base license is roughly $10mm. Moreover, the Ministry of Agriculture in China has suspended accepting shipbuilding applications for vessels operating in the Arafura Sea, Indonesia. We believe such a high entry barrier could effectively limit competition within this fishing area for the ocean fishing industry in China. Pingtan Marine management’s past operating history and relationship in relevant areas should ensure the company’s future profitability, in our view. Our price target is derived from a 10.5x P/E multiple and estimated 2015 EPS of $1.43. An analyst ratings summary and ratings history on Pingtan Marine Enterprise Ltd. Pingtan Marine Enterprise Ltd. closed at $2.45 yesterday. Please join our team. ReloDepot Thanks a lot. 214-682-8888 Peter 777realty@gmail Real Estate Broker.
Posted on: Wed, 23 Jul 2014 21:10:13 +0000
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