China Agri (606.HK) is a buy!

China Agri-Industries (0606.HK) tumbles 9.3% to HK$5.65 on trading resumption, hurt by concerns bio-fuel business may be affected by Beijing policy to halt grain-based bio-fuel projects, despite company saying it hasn't received official documents on this. UOB-KayHian says under new policy, government won't issue new licenses for new projects, but China Agri's Zhaodong facility has already got exclusive NDRC license; further, all of China Agri's new planned projects will use non-grain feedstock to produce fuel ethanol. UOB adds company believes reported policy "aims to regulate new grain-based projects, rather than to suspend production of existing grain-based projects".