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Brean Murray Initiates Coverage of Yongye International With Hold Rating, Does Not Name PT

Related YONG
Yongye International, Inc. Updates On Status Of Amended Going Private Transaction
Benzinga's M&A Chatter for Wednesday April 9, 2014

In a report published earlier today, Brean Murray, Carret & Co. initiated coverage of Yongye International, Inc. (NASDAQ: YONG) with a Hold rating, but did not name a price target.

Brean Murray went on to say “Since the beginning of 2011, Yongye has been regarded as a battleground stock in China's reverse takeover (RTO) space. On the one hand, it has garnered support in Asia's private equity arena (notably, Morgan Stanley's $50M investment in YONG) while, on the other hand, it is a favored short‐sale play by hedge funds. We consider the company a niche player in the fast‐growing Chinese agriculture market, and we like its unique selling strategy and attractive growth prospects. However, we see a disconnect between YONG's potential for sizable earnings growth and its current weak OCF owing to a substantially extended A/R cycle. This imbalance, consequently, keeps us on the sidelines for now; we foresee a buying opportunity once the company can generate sustainable OCF to support the stock price.”

Yongye International, Inc. closed on Friday at $3.15.

Posted-In: Brean Murray Carret & Co.Analyst Color Initiation Analyst Ratings


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