Wednesday, August 25, 2010

OSK Research maintains Trading Buy on Sino Hua An

KUALA LUMPUR: OSK Research said the weakening steel market since May 2010 may have capped Sino Hua An's (Huaan) earnings upside but the net profit of RM4.8 million in 2Q ended June 30, 2010 managed to pull the company out of the red.

It said on Wednesday, Aug 25 that the recovery in steel prices in past weeks reflects an improvement in market conditions for metallurgical coke in China although its sustainability remains uncertain.

'With this, together with the Chinese government's move to force the closure of outdated coke plants, we reiterate our Trading BUY call, with a target price of 47 sen. The fair value is derived from 0.7 times FY10 book value/share,' it said.

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