Wednesday, August 23, 2017

FW: AmBank Research - Ann Joo Resources : Demand to pick up in 2H17 BUY, 23 Aug 2017

 

STOCK FOCUS OF THE DAY         

Ann Joo Resources : Demand to pick up in 2H17                                                                                 BUY

 

We maintain our BUY call, forecasts and FV of RM3.86 for Ann Joo Resources (AJR), based on 10x FY18F fully diluted EPS, in line with the average of its three mid-cycles’ PE multiples during Jan’12–Sep’13, Jun’05–Jun’08 and Sep’10 till now. AJR’s 1HFY17 net profit came in broadly within expectations at 54% and 60% of our and consensus full-year forecasts respectively. AJR's 2QFY17 net profit dipped by 69% and 61% for YoY and QoQ respectively to RM28.6mil. 

 

AJR’s earnings visibility remains good underpinned by: 1) ongoing reforms structural reforms in China to curb steel production, particularly eliminating induction furnaces. This allows AJR to capitalise on the export market in Asean (which currently relies largely on steel supply from China); and 2) infrastructure projects locally to kick off in the 2HFY17 resulting in better demand for construction steel.

 

 

Others :

Hock Seng Lee : 1HFY17 hit by slower-than-expected billings                                                       BUY  

Boilermech : Outlook to improve in 2HFY18                                                                                          HOLD

Inari Amertron : Boosted by iris-scanning chips, additional testers                                             HOLD

Salutica : Delay in product launch poses drag                                                                                       HOLD

Ta Ann Hldgs : Plantation underpins 2QFY17 performance                                                             HOLD

UMW Oil & Gas : No relief despite lower loss                                                                                      HOLD

 

 

 

ECONOMIC HIGHLIGHT

Indonesia : Incoming data to determine potential easing measures

 

 

NEWS HIGHLIGHTS

BSTEAD : Boustead Plantations plans to buy DutaLand’s Sabah plots

IGB  : IGB Corp sees 41% profit jump in 2Q

SCOMI  : Scomi: Oil & gas to remain core biz

HARTA : Hartalega to build three more plants

 

 

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