Star Stock: China Life "buy" Call

BROKER CALL - China Lifestyle a 'buy' - Westcomb Securities Westcomb Securities has assigned China Lifestyle Food and Beverage Group Ltd a 'buy' rating and a target price of 0.40 sgd on initial coverage. "China Lifestyle is currently trading at undemanding prospective price earnings ratio of 7.1 times for 2006 and 6.0 times for 2007," Westcomb Securities said in a client note. "We peg its valuation at 10.5 times 2006 earnings and this will result in a price target of 0.40 sgd." The brokerage believes that China Lifestyle will benefit from the large market size for jelly products in China, estimated to be about 5-6 bln yuan. The brokerage said the company has the potential to increase its market share further from around 10 pct currently, ranking second in the Chinese market. Westcomb expects net profit for China Lifestyle to rise from 69.68 mln yuan in 2005 to 79.11 mln this year and further to 93.82 mln in 2007. At the midday close, China Lifestyle was flat at 0.295 sgd on volume of 4. 07 mln shares.