Nov. 14 (Bloomberg) -- Shandong Weigao Group Medical Polymer Co. jumped the most in six years in Hong Kong trading after posting third-quarter sales that beat analysts’ estimates.
Shandong Weigao shares surged 31 percent to HK$9.04 each before the mid-day break, the biggest intraday advance since July 2007, with trading volume 6.6 times the three-month full-day average. The stock was up 26 percent at HK$8.75 as of 1:42 p.m.
Revenue in the period grew 26 percent from a year earlier to 1.24 billion yuan ($204 million). Earnings per share increased 27.9 percent, beating market consensus by 27.9 percent, Credit Suisse Hong Kong Ltd. analyst Iris Wang wrote in a note today.
The Weihai, China-based maker of single-use aseptic polymer medical equipment said its rate of sales growth and profitability improved over the first half of 2013 because adjustment in sales strategies are gradually taking effect and efficiency of the integrated supply-chain management has improved, according to a statement of its financial results released yesterday.
“If the sales restructuring continues to boost revenue growth, Weigao’s share price is likely to go even higher,” Carol Xiao Qin Dou, an analyst at UOB Kay Hian Investment, said in a phone interview. “In the short term, you need to wait and see how the restructuring goes in the next few quarters.” Dou upgraded Weigao shares to buy from sell today.
UOB revised its target price to HK$8.18 per share from HK$6.70 and lifted Weigao’s revenue growth assumption to 24 percent from 19 percent for the current financial year.
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