Hudson Securities Initiating Coverage On China XD Plastics Company (CXDC)
Hudson Securities is initiating coverage on China XD Plastics Company (NASDAQ: CXDC) with an $8 price target, and a Buy rating.
In a note to clients, Hudson Securities writes, "We are initiating coverage of the common shares of China XD Plastics Company Ltd. (CXDC) with a Buy recommendation and a 12 to 18 month target price of $8. Our $8 target price is based on 15x our 2011 EPS estimate."
Later in the research report, Hudson Securities goes on to say, "Without clear visibility in 2011 vehicle sales, we assume a conservative top line assumption of 19.4% YoY growth and a 24% gross margin for 2011. If the top line growth can increase to 40% due to better passenger car production and sales while gross margin remains constant, we would expect to see diluted GAAP EPS increase to $0.77 from $0.54. If, through better operational or cost efficiencies, the company can expand gross margins by 100-basis points, we can expect diluted GAAP EPS to increase to $0.60 from $0.54."
Shares of China XD Plastics Co Ltd are gaining 2 cents to $6.50 in early trading.
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