KUALA LUMPUR: OSK Research said it was once again disappointed with Perwaja's deeper than expected losses in 3Q due to the mismatch between expensive iron ore pellets and lower selling prices of billets and Direct Reduced Iron (DRI).
It said on Tuesday, Nov 30 that although it could see a ray of light in 4Q, it still expect limited profit as the prolonged high premium on pellets may squeeze the margins of DRI and indirectly, billets.
'We are slashing our estimates for the next two years by a hefty 96.7% for FY10 and 34% for FY11. The new earnings translate into a lower target price of 97 sen, which implies limited downside. We remain NEUTRAL on Perwaja,' it said.
It said on Tuesday, Nov 30 that although it could see a ray of light in 4Q, it still expect limited profit as the prolonged high premium on pellets may squeeze the margins of DRI and indirectly, billets.
'We are slashing our estimates for the next two years by a hefty 96.7% for FY10 and 34% for FY11. The new earnings translate into a lower target price of 97 sen, which implies limited downside. We remain NEUTRAL on Perwaja,' it said.
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