[ET Net News Agency, 20 July 2018] UBS Global Research raised its target price for
Shandong Weigao Medical Polymer (01066) to HK$7.58 from HK$5.95, and upgraded its rating
to "buy" from "neutral".
The research house said the upgrade followed the announcement that the CSRC has approved
it to convert and list up to 2.64bn unlisted/domestic shares (58% of total shares
outstanding) into H shares.
It thinks the impact will be profound - helping resolve a long-term concern by aligning
founder and management interests with minority shareholders'.
Trading at 16.5x/14.4x 2018/2019 PE with sustainable low teens earnings growth, or a PEG
of 1.2x, versus 1.7x/1.3x PEG averages for H-share medical device/healthcare companies,
UBS thinks this major change and its profound impact on business operations has not been
fully reflected. (KL)