CSCSTEEL
MASTEEL
ANJOO
KINSTEEL
LIONIND
HIAPTEK
SSTEEL
Reiterate OVERWEIGHT on the solid asset backing. While the steel sector outlook remains gloomy and the earnings visibility of steel mills remains poor, we strongly believe that the worst is already behind us. Considering the strong asset backing of the local steel mills that are trading in the range of 0.15x-0.70x P/NTA, which are mostly below their respective historical trough level at -1 standard deviation (refer Figure 5), we think that the long steel companies under our universe at least justify a NEUTRAL or BUY recommendation. Although we agree that steel mills may be at risk of running into another loss making quarter or two before returning to the black considering the latest developments, we think the potential cumulative losses are limited given the small downside on steel prices from current levels. Premised on the lip-smacking P/NTAs of most of the steel mills, we maintain our OVERWEIGHT call on the long steel sector. We are keeping our BUY recommendation on Lion Industries (TP: RM1.60), Southern Steel (TP: RM1.82), Masteel (TP: RM1.03), and Kinsteel (TP: RM0.55) but rate Ann Joo (TP: RM1.12), and Perwaja (TP: RM0.70) as NEUTRAL.
Source: STEEL (OVERWEIGHT) Sector Update: A New Benchmark Pricing? ( http://www.osk188.com/articlepdf.jsp?id=27695)
ALL UP
OIL
KNM
PETRA
DIALOG
PANTECH
More: http://nexttrade.blogspot.com/2009/04/oil-gas-check-out-laggards.html
MASTEEL
ANJOO
KINSTEEL
LIONIND
HIAPTEK
SSTEEL
Reiterate OVERWEIGHT on the solid asset backing. While the steel sector outlook remains gloomy and the earnings visibility of steel mills remains poor, we strongly believe that the worst is already behind us. Considering the strong asset backing of the local steel mills that are trading in the range of 0.15x-0.70x P/NTA, which are mostly below their respective historical trough level at -1 standard deviation (refer Figure 5), we think that the long steel companies under our universe at least justify a NEUTRAL or BUY recommendation. Although we agree that steel mills may be at risk of running into another loss making quarter or two before returning to the black considering the latest developments, we think the potential cumulative losses are limited given the small downside on steel prices from current levels. Premised on the lip-smacking P/NTAs of most of the steel mills, we maintain our OVERWEIGHT call on the long steel sector. We are keeping our BUY recommendation on Lion Industries (TP: RM1.60), Southern Steel (TP: RM1.82), Masteel (TP: RM1.03), and Kinsteel (TP: RM0.55) but rate Ann Joo (TP: RM1.12), and Perwaja (TP: RM0.70) as NEUTRAL.
Source: STEEL (OVERWEIGHT) Sector Update: A New Benchmark Pricing? ( http://www.osk188.com/articlepdf.jsp?id=27695)
ALL UP
OIL
KNM
PETRA
DIALOG
PANTECH
More: http://nexttrade.blogspot.com/2009/04/oil-gas-check-out-laggards.html