Zibao is a Hong Kong based trader in non-ferrous metals, principally aluminium and copper, which it sources from a panel of suppliers around the world and sells to a small base of customers in China.
They listed their shares on AIM in June this year at 8p each. Recent interim results showed gross revenues maintained in HK$ terms, with gross margins broadly the same and opex down.
Zibao also appears closer to its first acquisition, which would be game-changing given the controllable and tight operational base already built.
With the declaration of an interim dividend Zibao joins a select group of dividend yielding AIM companies. We expect a total for the year of 0.41p per share giving a yield of 3.8%
Given economic uncertainties we conservatively reduce our estimates for the current year. However, weakness of Sterling and surprisingly resilient market ratios mean our target price is only slightly lower at 13.9p per share, versus 10.75p last close.