Brokers' take on Ying Li

RISING in anticipation: Ying Li's share price reacted positively to the news of Chongqing's planned spending of one trillion yuan (S$204 billion) on 323 infrastructure and property projects to bolster economic growth. Its urban renewal projects stand to benefit from an anticipated influx of foreign direct investments. Our revised price target of $1.04 following changes in key assumptions after our recent site visit still implies a whopping 96 per cent upside.

Only eight storeys of the IFC office tower have been built to date. At this rate, we believe the 62-storey tower is unlikely to be completed by end-2010 as previously guided. Hence, we lower our occupancy rate assumption for 2011. The IFC accounts for 23 per cent of our RNAV estimates.

According to our channel checks, our average selling price and rental assumptions for Ying Li's prime property projects are still in line with the asking rates in the market. Management reiterated its optimism about the availability of credit as local and offshore banks have offered exclusive loan facilities.

We cut our RNAV/share to $1.04 from $1.20 as we revise our assumptions based on the latest data points and have pushed back the expected completion of the IFC office tower to Q2 2011. Near-term catalysts include the signing of retail tenancy agreements at the IFC in June 2010 and the outcome of the bidding for the Wuyi Road land parcel by H1 2010.

Wow....a potential gain of nearly 100%!!! Solid....but please keep both eyes open! Things that sound too good...may end up to be "too good to be true!" too. But for now...may still be good enough to consider a small bet when the price is to pullback nearer to break peak price of 51.5 cts vs the last done price of 55.5 cts.