OSK Research upgrades CSC Steel, TP RM2.22
Written by Joseph Chin
Monday, 08 February 2010 09:02
KUALA LUMPUR: OSK Research has upgraded its forecast upwards by 30.8% for FY10 and arrive at a new target price of RM2.22 after adding its projected net cash per share for FY10 to its 6.0 times FY10 EPS valuation.
"Upgrade to Buy from Trading Buy. We are also impressed by the company's strong balance sheet and its net cash of RM303 million as at Dec 31, 2009," it said on Monday, Feb 8.
CSC Steel's 4Q numbers were above OSK Research and consensus estimates. Full year earnings jumped 55.1% year-on-year while its quarter-on-quarter numbers declined slightly by 4.6%, mainly due to the timing difference between the average selling prices of its finished goods and raw materials.
Nonetheless, it was positive on the upcoming one or two quarters as steel demand starts to recover gradually. As such, it is revising upwards its FY10 numbers, which translate into a new TP of RM2.22 from RM1.68 previously.