KUALA LUMPUR: HIAP TECK VENTURE BHD []'s share price slipped on Friday, July 22 as analysts were cautious about the venture into the upstream steel mill project.
At 4.05pm, it was down four sen to RM1.10 with 2.31 million shares transacted.
OSK Research has a Sell call on Hiap Teck Venture and reduced its fair value to 95 sen as it was cautious about the latest venture.
Hiap Teck's 55% owned Eastern Steel Sdn Bhd had entered into an engineering and procurement contract and a CONSTRUCTION [] contract with China Shougang International Trade and Engineering Corporation for the 1st phase design, procurement and construction of its integrated steel mill in Terengganu.
'We continue to remain cautious on this upstream venture, given the capex intensive nature and new learning curve in operating a blast furnace, the dilution in their share price from its proposed rights issue, and struggling earnings with poor visibility beyond 6 months for the sector.
'We downgrade the Company to SELL from NEUTRAL, while holding our FV of 95 sen at 8.0 times FY12 EPS given its recent share price run-up of 20% ahead of our FV,' it said.
At 4.05pm, it was down four sen to RM1.10 with 2.31 million shares transacted.
OSK Research has a Sell call on Hiap Teck Venture and reduced its fair value to 95 sen as it was cautious about the latest venture.
Hiap Teck's 55% owned Eastern Steel Sdn Bhd had entered into an engineering and procurement contract and a CONSTRUCTION [] contract with China Shougang International Trade and Engineering Corporation for the 1st phase design, procurement and construction of its integrated steel mill in Terengganu.
'We continue to remain cautious on this upstream venture, given the capex intensive nature and new learning curve in operating a blast furnace, the dilution in their share price from its proposed rights issue, and struggling earnings with poor visibility beyond 6 months for the sector.
'We downgrade the Company to SELL from NEUTRAL, while holding our FV of 95 sen at 8.0 times FY12 EPS given its recent share price run-up of 20% ahead of our FV,' it said.
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