For the first time, Daimo gave Fenmei Packaging (00468-HK) a purchase investment rating, with a target price of 6.7 yuan, saying that the company's growth potential has not yet been reflected in the stock price. It is expected that thanks to strong sales growth in domestic and foreign markets, Fenmei Packaging will continue its growth momentum, and that earnings per share in the next 10 years are expected to increase about 4 times from RMB 0.18 in 2010 to RMB 0.85.

Daimo said that for the domestic market, the compound annual growth rate of Fenmei Packaging's aseptic packaging sales is expected to be 13%. It is estimated that by 2020, the company's domestic market share will increase from 12% in 2010 to 23%, and sales will increase 22% per year.

The bank said that Fenmei Packaging also has great potential to expand the international market, and the company will enter the European market starting in 2012.

Fenmei rose 1.05% yesterday to close at HK$5.77.