Jinpan (NASDAQ-JST) Initiating Coverage

Mon, 2012-10-29

application/pdf iconjst-initiating-coverage-2012-10-29-blackore-research.pdf

Title: Jinpan (NASDAQ-JST) initiating coverage - OVERWEIGHT - Strong business fundamentals and growth prospects in China; overly discounted by market

Synopsis: We initiate coverage of Jinpan International Limited (NASDAQ: JST) with an Overweight rating and a 12-month target price of US$7.59, offering a 70.6% upside potential from the current price of US$4.45. Jinpan is currently trading at 3.9x FY2012 EV/EBITDA and 5.0x FY2012 P/E, which is discounted significantly compared to domestic and international peers. We believe that the discount is unjustified and may be attributed to negative investor sentiment towards Chinese-listed shares than to the business itself. Therefore, we believe there is a strong upside potential for investors in the long-term once the sentiments start to shift.

Report length: 21 pages (excluding legal disclaimer)

Miller Chu
Peter Fang, CFA