Stock Upgraded: Longcheer target price raised to 2.03 sgd by CIMB

CIMB-GK Research said it has raised its target price for Chinese mobile phone designer Longcheer Holdings to 2.03 sgd from 1. 65 sgd previously as it expects sales of handsets in the China market to significantly increase as mobile phone penetration grows in rural areas. "The current strength in operating numbers provides gives us reassurance that the existing business model still has some way to run, sustained by increasing mobile penetration into less sophisticated rural markets that are driven by handset feature and price comparisons and less by brand," CIMB said in a note to clients. In addition to domestic handset sales, CIMB said Longcheer is looking to export some of its handset models and is finalizing an order with a distributor in North America. Longcheer also expects to provide a sample order for mobile TVs by the end of the year, CIMB said. To factor in increased domestic orders and emerging export orders, CIMB said it has raised its years to June 2007 through 2009 net profit forecasts for Longcheer by 6-8 pct. At 10.36 am, Longcheer was up 0.075 sgd or 9.15 pct at 0.895 with 7.0 mln shares traded.