Wednesday, 9 May 2012

Maybank IB Research upgrades Ann Joo to Buy, raises TP to RM2.20

KUALA LUMPUR (May 9): Maybank IB Research has upgraded ANN JOO RESOURCES BHD [] to a Buy with and raised it target price to RM2.20 (from RM1.30).

In a note Wednesday, Maybank IB Research said it was turning positive on Ann Joo due to: (i) pent-up local steel demand from 2H12 onwards; (ii) a potential long-term high-margin vendor contract from Petronas; (iii) stronger earnings in 2H12 upon the completion of the fine-tuning of its mini-blast furnace (BF) offsetting continued expected losses in the upcoming 1Q12 results.

“We maintain our forecasts for now but our TP is raised to MYR2.20 (from MYR1.30), as we attach a mid-cycle 1.0x P/BV target (vs. 0.6x trough),” it said.

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