Standard Chartered Group tracked Shun Cheng Holdings (0531.HK) for the first time and gave it a purchase rating, with a target price of HK$2.00. The bank said that Shuncheng Holdings is ready for the US economic recovery because the company is both a manufacturer and wholesaler of private label furniture, and its execution record is good.

The bank predicts that Shuncheng Holdings' earnings per share will grow at a compound annual rate of 17% in the next 3 years. During this period, through cost reductions and acquisitions, the company's growth rate between 2010 and 2013 will reach 3 times the industry level.

Standard Chartered added that the stock's valuation is still low, equivalent to 9 times the predicted earnings per share for fiscal year 2011, or 6 times the predicted earnings per share without cash. Net cash per share is HK$0.5, which can maintain a 5% dividend yield.

Shun Cheng Holdings rose 1.33% yesterday to close at HK$1.52.