Zhongpin Registers For Fund Raiser

Piper Jaffray has published a research report on Zhongpin, Inc. HOGS after the company filed a registration for the potential raising of funds. In the report, Piper Jaffray writes "Zhongpin has filed a registration (Form S-3) for a potential offer of equity, debt and/or other instruments to raise up to a maximum of US$250mil. As of Sep-10, Zhongpin's net gearing was 32.6%, and we estimated the capex for FY11E at $120mil, against an operating cashflow of US$87mil. According to management, the aim of the registration is to give management flexibility to raise funds from equity in FY11E if interest rates hike and bank loans becomes less available. No timing or price of offer has been specified in the registration." Piper Jaffray maintains its Overweight rating and $26.80 price target. Zhongpin closed Friday at $17.76.