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发表于 23-2-2012 10:45 PM
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本帖最后由 invest2k 于 23-2-2012 10:48 PM 编辑
Published February 21, 2012
Ann Joo seen rebounding on MRT rollout
AmResearch sets RM2.73 'fair' value; from RM2.10 now
By S JAYASANKARAN
IN KUALA LUMPUR
A LOCAL research house has called a 'buy' on construction steelmaker Ann Joo Resources, citing a turnaround in 2012 on the back of new orders from a rollout of the Klang Valley mass rapid transit (MRT) project this year.
The steelmaker's earnings is expected to drop precipitously (57 per cent) for the year ended December 2011 - to around RM30 million - owing to start-up costs relating to the commissioning of a new blast furnace last year. The higher costs of raw materials such as coking coal also ate into earnings.
But AmResearch, a unit of the Arab-Malaysian Banking Group, forecast a turnaround for the steelmaker this year owing to the 'imminent rollout' of the MRT line from Sg Buloh near Kuala Lumpur to Kajang.
That, and other sales from new infrastructure projects, was likely to boost earnings to close to RM139 million which, said the research house, would place its 'fair' value at RM2.73 a share. The stock trades at around RM2.10 apiece.
The appraisal illustrates the potential that Prime Minister Najib Razak's Economic Transformation Programme holds for infrastructure, construction and materials' supply firms in Malaysia.
Already, specialist construction stocks such as IJM and Gamuda have taken off ahead of project awards as investors rush to cash in on the potential bonanza.
The report's findings are also in line with a recent estimate by Malaysia's central bank that 2012's economic growth would be around 5-6 per cent on account of strong domestic demand.
The AmResearch report, which was released yesterday, added that the MRT project wasn't the only one that could potentially benefit Ann Joo.
Others included the upcoming West Coast Expressway, the billion-dollar upgrade of the capital dubbed the Kuala Lumpur International Financial District and the double tracking of the Gemas-Johor Baru rail project.
But the MRT was the clear biggie: AmResearch indicated that the line alone would require some 500,000 tonnes of steel products.
In addition, it said that the firm would benefit from 'the normalisation of key input costs like iron ore, scrap metal and coking coal'. Finally, with the blast furnace up and running this year, Ann Joo would receive the full-year impact from its earnings.
The report said that the firm's gearing peaked last year at 1.2 times, declining to one and 0.8 times over the next two years. That would reduce finance costs while the firm's utilisation rates were expected to hit 80 per cent this year.
With projected earnings of RM139 million in 2012, AmResearch said that Ann Joo would be trading at 7-9 times prospective earnings, which 'was below its average six-year historical PE of 11 times'. |
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