STOCK FOCUS OF THE DAY
Ann Joo Resources: Soft steel prices temporary, fundamentals intact BUY
We reiterate our BUY recommendation on Ann Joo Resources (AJR) with unchanged forecasts and FV of RM4.34 per share. Our FV is 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.
The recent slide in AJR share price was largely triggered by the decline in Chinese steel prices. Steel prices in China have dropped ~20% MoM in January 2018 due to price correction from a high base in Dec 2017 (RMB4,900/tonne equivalent to RM3,000/tonne). Recall, steel prices shot up in Dec 2017 due to the Chinese government's Winter Policy (production curbs between December and March to reduce pollution during the winter season). Currently, steel prices in China are hovering around RMB4,000/tonne (RM2,500/tonne).
We make no changes to our forecasts as we do not expect steel prices in China to fall further from the current levels as demand is still strong locally in China coupled with further steel sector reforms that will reduce steel production.
Others :
Tan Chong Motor: Readying its battle-axe HOLD
STOCKS ON RADAR
Green Packet, Wah Seong Corporation, Prestariang, Yinson Holdings
NEWS HIGHLIGHTS
Green Packet: ‘Set to announce RM300m deal with MYTV’
D'nonce: Confirms MD Law is looking to sell his stake in the company
Property Sector: No sign of property bubble: CBRE-WTW
Mah Sing: Partners EduCity for student housing
DISCLAIMER:
The information and opinions in this report were prepared by AmInvestment Bank Bhd. The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of AmInvestment Bank Bhd. Bhd may from time to time have a position in or with the securities mentioned herein. Members of the AmBank Group Bhd and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgment as of this date and are subject to change without notice.
****************************************************************************************************************************************************************************************************************************************************************************************************************
DISCLAIMER:
This message may contain confidential and privileged information for its intended recipient(s) only. If you are not an intended recipient, you are hereby notified that any review, dissemination, and distribution, printing or copying of this message or any part thereof is strictly prohibited. Please delete the entire message and inform the sender of the error. Any opinions, conclusions and other information in this message that are unrelated to official business of AmBank Group are those of the individual sender and shall be understood as neither explicitly given nor endorsed by AmBank Group.
****************************************************************************************************************************************************************************************************************************************************************************************************************
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.