True enough, Sino Grandness' gains surge 87% to RMB84.5m

Even revenue rocketed amazingly.

According to a release, Sino Grandness announced an 87% increase in 3Q12 earnings of RMB 84.5m on the back of a 75% growth in revenue.

Earlier this week, we had raised our earnings estimates by 11% to be the highest on the street and forecasted 3Q to come in at RMB 77m but results have exceeded ours and consensus expectations.

This is due to stronger than expected sales and gross margins for its canned food business which is attributed to a good harvest year resulting in lower procurement costs.

We raise our sales and gross margin assumptions for its canned food business and trimmed opex. Our earnings forecast for FY12 is now lifted by 9% to RMB 268m while our FY13-14F earnings have been raised by 5% each respectively. Our TP is raised from S$0.65 to S$0.68, pegged to an unchanged 3x FY13F earnings (in-line with its historical mean).