Company Name: ANN JOO RESOURCES BHD
|Research House: KENANGA||Price Call: SELL||Target Price: 1.62|
Kenanga Research lowered its target price on steel maker Ann Joo Resources Bhd's stock to RM1.62 from RM1.96, citing weak demand for steel products due to the protracted European financial crisis.
Kenanga, which maintained its "market perform" rating on Ann Joo, said the oversupply of steel in China could have exacerbated the situation.
"We expect a slower 1H12 due to lackluster demand in the international market as the long-drawn European crisis caused customers to delay their purchases," the broker wrote in a note to clients.
Reflecting these concerns, the stock has dipped nearly 18 percent since mid-April.
However, Ann Joo could benefit from demand coming from key infrastructure, port and airport projects, the broker said. -- Reuters