China Minzhong Food (K2N.SG) +3.1% at more than 3-week high of $1.34, extending 5.6% gain since beginning of last week, as investors deem recent pullback on gradual exit of several major IPO shareholders as buying opportunity.

As vegetable processor listed in April, investors like CMIA Capital have been paring stakes via open-market sales when 6-month lock-up period expired in October. “While some investors may view the potential private equity funds selling as a major overhang, we view it a positive development,” says BNP Paribas, which has Buy call with $1.76 target.

As average investment costs for all 3 private equity funds, which collectively own more than 40% stake, only $0.26/share, “it makes sense for (them) to lock in profit.” Tips Minzhong as ideal investment as current high energy prices prompt farmers to plant higher-margin crops, leading to higher average selling prices.

Orderbook quotes suggest minimal upside beyond $1.35.

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