BROKER CALL China's CITIC Pacific Kept 'Buy/Low Risk' on Asset...

BROKER CALL China's CITIC Pacific Kept 'Buy/Low Risk' on Asset Growth- Citigroup

From: AFX-Asia | Date: 5/9/2007

BEIJING (XFN-ASIA) - Citigroup said it is reiterating its 'buy/low risk' rating and raising its target price by 5.7 hkd to 36.7 hkd for CITIC Pacific on growth in three core businesses and the disposal of non-core ones.

Property in China, speciality steel and an iron ore mine in Australia have been CITIC Pacific's core assets, while the sale of CITIC 1616 netted gains of 1.65 bln hkd, Citigroup said.

Given a significant increase in net asset value (NAV) following CITIC Pacific's full year results, the company's stock has moved to trading at a 27 pct discount to NAV, compared to its previous average of 10 pct, it said.

'If the group continues to execute to plan, we see upside risk to our current estimates,' analyst Anil Daswani said.

The note added that key catalysts over the next 12 to 18 months include the announcement of up to three new equity partners for CITIC Pacific's iron ore projects and development of its Hainan property project.

At the close, CITIC Pacific was up 0.25 hkd, or 0.84 pct, at 29.85 hkd

(1 usd = 7.8 hkd)