China Fire & Security Group (CFSG)

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Piper Jaffray adds China Fire & Security (Nasdaq: CFSG) to its Alpha List and maintains a Buy rating and $18 price target.

The firm cited several catalysts that should drive shares of China Fire & Security higher within the next few months:
1. the Company has a "healthy backlog" of orders, which provides excellent earnings visibility going into 2008;
2. China Fire & Security's high level of earnings visibility could create upside potential to earnings estimates;
3. new contract wins will provide positive catalysts for China Fire in the near-term; and
4. concerns about the weakening U.S. economy have caused investors to become more interested in Chinese stocks, "yet valuations still remain attractive relative to growth."

Piper Jaffray's $18 price target on China Fire & Security is based on 17x and 14x its FY08 and '09 EPS estimates, respectively, representing a sharp discount relative to the firm's 40% expected operating profit growth rate for the next two years.

China Fire & Security Group, Inc. engages in the design, development, manufacture, and sale of various fire safety products for the industrial fire safety market in the People's Republic of China.