[ET Net News Agency, 20 June 2018] Minth Group (00425) said two of its chrome-plating
production lines in Jiaxing city were burnt down in the afternoon of 17 June. Credit
Suisse expects Minth to book limited impairment loss as the insurance covered all assets
(e.g., factory, equipment) with 5-10% insurance deductible.
The company reiterated its 2018 full-year revenue guidance unchanged post the accident
as it has already relocated production to idle capacity in Guangzhou and Tianjin plants.
Thus, there is almost no impact on orders delivery. Minth will also start a new production
line in Jiaxing in two weeks.
In the long run, Minth plans to build a new chrome-plating production line in Jiaxing
city to help its long-term revenue growth, which may take six months. Thanks to the
company's quick response to the accident, Credit Suisse expects there will be very limited
impact on Minth's products delivery and revenue growth.
Credit Suisse maintained its "outperform" call on Minth, with an unchanged target price
of HK$46. (KL)