February 25, 2011

MASTEEL - OSK Research keeps Neutral call on Masteel

Stock Name: MASTEEL
Company Name: MALAYSIA STEEL WORKS (KL)BHD
Research House: OSK

KUALA LUMPUR: OSK Research is keeping its Neutral call on Malaysia Steel Works (KL) with a fair value of RM1.34, derived from 6x PER and 0.59x P/NTA on FY11 figures.

It said on Friday, Feb 25 it was happy to see Masteel's bread and butter steelmaking business continue to beat its bigger peers, posting a core net profit of RM42.2m in FY10, which was well within its estimates but above consensus.

'While we are upbeat on earnings for 1HFY11, we remain cautious of its outlook beyond six months and the investment risk from its newly proposed rail transit project in the south of Peninsular Malaysia,' OSK Research said.

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