Showing posts with label KINSTEL. Show all posts
Showing posts with label KINSTEL. Show all posts
September 2, 2013
July 17, 2013
March 1, 2013
December 3, 2012
May 16, 2012
MIDF upgrades Kinsteel to 'buy'
Stock Name: KINSTEL
Company Name: KINSTEEL BHD
Stock Name: KINSTEL
Company Name: KINSTEEL BHD
OSK Research is maintaining a "neutral" call on steel manufacturer, Kinsteel Bhd, saying that it was not pinning too much hope on its business since the implementation of mega projects under the Economic Transformation Programme may encounter delay.
"However, we expect the better iron-making margin from cheaper iron ore pellets to more than compensate for the negative impact arising from the potential delay in the commissioning of the concentration and pelletization plant at Perwaya, Kinsteel's subsidiary," OSK Research said in its research notes.
OSK is maintaining its "neutral" call on Kinsteel with unchanged fair value of 49 sen.
MIDF Research, however, has upgraded its call to "buy" from a "neutral" recommendation on Kinsteel with a target price of 51 sen.
"Domestically, we expect orders for steel bars to be sustained at least in the next five to 10 years as there are plenty of sizeable construction projects currently ongoing, with more to be awarded," MIDF Research said.
MIDF Research said Kinsteel's stock price has declined by 15.7 per cent year to date.
"We believe that investors may have over-imputed the external risks for this stock. Hence, given the ample upside of 20 per cent, we are upgrading Kinsteel to 'buy'," MIDF Research said.
Kinsteel swung to profit after six quarters of net losses. It delivered a net profit of RM10.3 million for first quarter financial year 2012.
As at 4.34 pm, Kinsteel rose one sen to 43.5 sen. -- BERNAMA
Company Name: KINSTEEL BHD
| Research House: OSK | Price Call: HOLD | Target Price: 0.49 |
Stock Name: KINSTEL
Company Name: KINSTEEL BHD
| Research House: MIDF | Price Call: BUY | Target Price: 0.51 |
OSK Research is maintaining a "neutral" call on steel manufacturer, Kinsteel Bhd, saying that it was not pinning too much hope on its business since the implementation of mega projects under the Economic Transformation Programme may encounter delay.
"However, we expect the better iron-making margin from cheaper iron ore pellets to more than compensate for the negative impact arising from the potential delay in the commissioning of the concentration and pelletization plant at Perwaya, Kinsteel's subsidiary," OSK Research said in its research notes.
OSK is maintaining its "neutral" call on Kinsteel with unchanged fair value of 49 sen.
MIDF Research, however, has upgraded its call to "buy" from a "neutral" recommendation on Kinsteel with a target price of 51 sen.
"Domestically, we expect orders for steel bars to be sustained at least in the next five to 10 years as there are plenty of sizeable construction projects currently ongoing, with more to be awarded," MIDF Research said.
MIDF Research said Kinsteel's stock price has declined by 15.7 per cent year to date.
"We believe that investors may have over-imputed the external risks for this stock. Hence, given the ample upside of 20 per cent, we are upgrading Kinsteel to 'buy'," MIDF Research said.
Kinsteel swung to profit after six quarters of net losses. It delivered a net profit of RM10.3 million for first quarter financial year 2012.
As at 4.34 pm, Kinsteel rose one sen to 43.5 sen. -- BERNAMA
May 14, 2012
Maybank IB upgrades Kinsteel to 'buy'
Stock Name: KINSTEL
Company Name: KINSTEEL BHD
Maybank IB Research upgraded Kinsteel Bhd to "buy" as it expected the steel manufacturer to turn around in its upcoming earnings result on lower iron ore cost and better local sales.
"After posting losses in the past six quarters and the inventory write-down of RM94 million in the fourth quarter of last year, we expect the company to turn profitable in the first quarter of this year," the broker said in a research note on Monday.
Maintaining a target price of 49 sen on the counter, Maybank IB said Kinsteel's margins should recover given that iron ore pellet cost had fallen by 15 percent quarter on quarter while steel average selling price had risen by 10 percent.
"Additionally, the sales volume at its downstream division (steel bars and rods) has also seen some improvement," it added.
By 9.33am, Kisteel shares dropped 1.19 percent, underperforming the Malaysian benchmark stock index that dropped 0.20 percent. -- Reuters
Company Name: KINSTEEL BHD
| Research House: MAYBANK | Price Call: BUY | Target Price: 0.49 |
Maybank IB Research upgraded Kinsteel Bhd to "buy" as it expected the steel manufacturer to turn around in its upcoming earnings result on lower iron ore cost and better local sales.
"After posting losses in the past six quarters and the inventory write-down of RM94 million in the fourth quarter of last year, we expect the company to turn profitable in the first quarter of this year," the broker said in a research note on Monday.
Maintaining a target price of 49 sen on the counter, Maybank IB said Kinsteel's margins should recover given that iron ore pellet cost had fallen by 15 percent quarter on quarter while steel average selling price had risen by 10 percent.
"Additionally, the sales volume at its downstream division (steel bars and rods) has also seen some improvement," it added.
By 9.33am, Kisteel shares dropped 1.19 percent, underperforming the Malaysian benchmark stock index that dropped 0.20 percent. -- Reuters
March 1, 2012
KINSTEEL (FV RM0.49 - NEUTRAL) FY11 Results Review: Pain All Around
Stock Name: KINSTEL
Company Name: KINSTEEL BHD
Company Name: KINSTEEL BHD
| Research House: OSK | Price Call: HOLD | Target Price: 0.49 |
Kinsteel posted a net loss of RM121.6m in FY11, largelyattributed to the loss in its upstream operation (37%-owned Perwaja), as well as poor showing at its downstreamoperation following the sharp drop in material and steel prices. Apart fromexpecting stable but thin rolling margins moving forward, we are pinning somehopes on its upstream makeover via the building of itsown pelletization plant and potentially securing an iron ore mining concession. Thatsaid, we suspect Kinsteel's cash flow may come under strain as we see a lowtake-up for its on-going fund raisingexercise, and thus downgrade the stock to NEUTRAL. Our lower fairvalue of RM0.49 is derived from 0.72x FY12 BV, or -0.5 standard deviation of its historicaltrading range.
2011 a painful year.Kinsteel posted a net loss of RM121.6m for FY11 on a drastic loss in 4Q.Although its downstream operation normally enjoys stable albeit low margins, wesuspect the sharp fall in steel prices during the period may haveeroded the already meager margins,together with some loss in inventory value. However, it also suffered a majorsetback at 37%-owned Perwaja, which recorded a huge loss on the back of poor steelmarket conditions, which gave rise to anegative mismatch between lower selling pricesand the still-high raw material costs, a writedown on inventory to realisablevalue amounting to RM94.2m, while a RM60m from reversal of deferred tax assetrecognised in the prior year exacerbated loss.
Pinning hopes on upstream makeover. There are nomajor concerns over Kinsteel upstreamoperation as we expect the kitchen sinking in 4Q to have cleaned up the high costinventory plus stable rolling marginand a potential uptick in long steel demand in Malaysia. As for Perwaja, the second verbal confirmation from Terengganu's Menteri Besar onawarding the mining concession to the company in December 2011 provided some assurance that the officialaward is around the corner. Perwaja is also building a pelletizing plant thatit hopes will boost the profitability of its direct reduction plant. This plantwill enable it to meet its own iron ore pellet needs and help it to achievesavings of up to USD50 a tonne from the procurement of local iron ore,logistics benefits, in-house value-adding and utilization of tax credits onaccumulated losses.
Downgrade to NEUTRAL.Perwaja's huge loss will certainly dousethe interest of minority shareholders in subscribing for Kinsteel's ongoing Restricted Offer forSale, unless the concession is given before the subscription closing date. Thismay potentially mean that Kinsteel is likely to end up with majority ofPerwaja's RCULS costing up to RM280m, and hence drain the group's cash flow.With that, we downgrade Kinsteel to NEUTRAL, with our FV cut to RM0.49. Weare removing our earlier 10% iron oreDCF which we included in our base valuation of 0.72x FY12 BV (-0.5 standarddeviation).
Source: OSK188
Kinsteel: Maintain Hold - Awaiting iron ore concession award
Stock Name: KINSTEL
Company Name: KINSTEEL BHD
Significantly disappoints. Kinsteel's 2011 core net loss of RM87m (2010: RM33m net loss) was significantly below our full-year net loss forecast of RM22m and consensus' RM25m. Though near-term earnings will remain weak, we maintain our Hold rating, as the potential official award of the iron ore mine concession to Perwaja is a major re-rating catalyst. Maintain forecasts and TP of RM0.49 (0.55x P/BV).
Maybank Research 1 March 2012
Click here for full report
Company Name: KINSTEEL BHD
| Research House: MAYBANK | Price Call: HOLD | Target Price: 0.49 |
Significantly disappoints. Kinsteel's 2011 core net loss of RM87m (2010: RM33m net loss) was significantly below our full-year net loss forecast of RM22m and consensus' RM25m. Though near-term earnings will remain weak, we maintain our Hold rating, as the potential official award of the iron ore mine concession to Perwaja is a major re-rating catalyst. Maintain forecasts and TP of RM0.49 (0.55x P/BV).
Maybank Research 1 March 2012
Click here for full report
February 8, 2012
Not Surprised by MARC's Rating Watch
Stock Name: KINSTEL
Company Name: KINSTEEL BHD
Company Name: KINSTEEL BHD
| Research House: OSK | Price Call: TRADING BUY | Target Price: 0.66 |
November 29, 2011
Kinsteel (Hold): Iron ore concession to provide the kicker
Stock Name: KINSTEL
Company Name: KINSTEEL BHD
Below expectations. 9M11 net loss of RM19m (9M10: RM11m net profit) is significantly below our full-year net profit forecast of RM10m and consensus' RM12m. Though near-term earnings will remain weak, we maintain our Hold rating as the potential official award of the iron ore mine concession to Perwaja is a major positive re-rating catalyst. We now project 2011 net loss of RM22m and cut 2012-13 EPS forecasts by 20-21%. TP is lowered to RM0.49 (-20%) as we peg Kinsteel at trough P/BV valuation of 0.55x (from 0.7x), similar to 2009.
Maybank research (29 November 2011)
Click here for full report
Company Name: KINSTEEL BHD
| Research House: MAYBANK | Price Call: HOLD | Target Price: 0.49 |
Below expectations. 9M11 net loss of RM19m (9M10: RM11m net profit) is significantly below our full-year net profit forecast of RM10m and consensus' RM12m. Though near-term earnings will remain weak, we maintain our Hold rating as the potential official award of the iron ore mine concession to Perwaja is a major positive re-rating catalyst. We now project 2011 net loss of RM22m and cut 2012-13 EPS forecasts by 20-21%. TP is lowered to RM0.49 (-20%) as we peg Kinsteel at trough P/BV valuation of 0.55x (from 0.7x), similar to 2009.
Maybank research (29 November 2011)
Click here for full report
August 1, 2011
Kinsteel advances after OSK Research upgrade to Trading Buy, raised TP of 82c
Stock Name: KINSTEL
Company Name: KINSTEEL BHD
KUALA LUMPUR: KINSTEEL BHD [] shares rose on Monday, Aug after OSK Research said that the time had come to rerate the stock as its income stream was expected to improve via upstream operation in the form of 37% owned Perwaja.
At 9.45am, Kinsteel was up three sen to 72.5 sen with 810,000 shares traded.
OSK Research in a note Aug 1 said that aside from the progress towards the commissioning of Perwaja's concentration and pelletisation plant in 1HFY12 which may potentially contribute to savings of USD50 per tonne of iron ore pellet, it was also excited over the Terengganu state government's readiness to consent to Perwaja's application to mine iron ore in Bukit Besi, Terengganu.
As iron ore fine currently costs over USD160 per tonne free-on-board (FOB) vs the local cost of less than USD50 a tonne, the concession would certainly be lucrative, said the research house.
'Our back-of-envelope calculation shows that any such concession may translate into a DCF of 89 sen per Kinsteel share based on its 37% stake.
'Meanwhile, we are incorporating 10% of the iron ore mining DCF to our original fair value pending official award of the concession, from which we arrive at a new FV of 82 sen, and an upgrade on our rating on Kinsteel to Trading BUY,' it said.
''
Company Name: KINSTEEL BHD
| Research House: OSK | Price Call: TRADING BUY | Target Price: 0.82 |
KUALA LUMPUR: KINSTEEL BHD [] shares rose on Monday, Aug after OSK Research said that the time had come to rerate the stock as its income stream was expected to improve via upstream operation in the form of 37% owned Perwaja.
At 9.45am, Kinsteel was up three sen to 72.5 sen with 810,000 shares traded.
OSK Research in a note Aug 1 said that aside from the progress towards the commissioning of Perwaja's concentration and pelletisation plant in 1HFY12 which may potentially contribute to savings of USD50 per tonne of iron ore pellet, it was also excited over the Terengganu state government's readiness to consent to Perwaja's application to mine iron ore in Bukit Besi, Terengganu.
As iron ore fine currently costs over USD160 per tonne free-on-board (FOB) vs the local cost of less than USD50 a tonne, the concession would certainly be lucrative, said the research house.
'Our back-of-envelope calculation shows that any such concession may translate into a DCF of 89 sen per Kinsteel share based on its 37% stake.
'Meanwhile, we are incorporating 10% of the iron ore mining DCF to our original fair value pending official award of the concession, from which we arrive at a new FV of 82 sen, and an upgrade on our rating on Kinsteel to Trading BUY,' it said.
''
July 20, 2011
January 17, 2011
KINSTEL - Steel sector poised for re-rating
Stock Name: KINSTEL
Company Name: KINSTEEL BHD
Research House: HWANGDBS
Southern Steel Bhd
(Jan 17, RM2.21),
Kinsteel Bhd
(Jan 17, 96 sen)
Sector's valuation remains attractive: Construction of the RM36 billion mass rapid transit (MRT) project is targeted to begin in July. With that, local steel demand is set to rise.
Pulling back the steel consumption trend from 1994 to 1997 ' when the government implemented high-impact projects such as KLIA, Petronas Twin Towers, Putrajaya city and the LRT lines (project values totalled RM54 billion) ' long steel consumption in Malaysia surged above 310,000 tonnes per month, higher than the average 270,000 tonnes per month.
Then, the sector traded at an average multiple of 1.6 times book value. Looking ahead, we believe the MRT project together with the LRT extension (estimated project values RM36 billion and RM7 billion'' respectively) could lift the demand momentum to the levels recorded in 1994 to 1997.
Hence, we believe the sector is poised for a re-rating given the positive contract flows. The sector's valuation remains attractive, currently trading below book at 0.8 times book value.
We advocate a 'buy' on Kinsteel. Our RM1.25 target price (36% upside) is based on 1.3 times FY11F net tangible assets (NTA). Kinsteel is a value buy, trading at one times NTA, with three-year earnings compound annual growth rate (CAGR) of 42% and 10% return on equity (ROE).
We upgrade Southern Steel to 'buy' (from 'hold') and retain our RM2.50 TP based on 1.2 times FY11F NTA. Southern Steel offers an attractive matrix of 13% ROE, 3% dividend yield and currently trades at one times NTA.
Our forecast for long steel consumption ex-MRT impact in 2011 is 3 million to 3.2 million tonnes, a conservative 5% growth from 2010.
Hypothetically, if steel comprises 10% of the MRT project value, it will translate to 1.6 million tonnes of steel requirement and effectively lift steel usage by about 8% per annum.
The two key risks: (i) Delay in execution. In our opinion, major delay is unlikely as the MRT project was earmarked as a vital component of the Economic Transformation Programme and is one of the prime minister's priority projects; (ii) Soft steel prices and rising iron ore cost affecting profitability. That said, we expect steel prices to improve in 2011.
On our scorecard, Kinsteel ('buy'; TP RM1.25) is ranked first. Kinsteel is an earnings recovery play with three-year net profit CAGR of 42% and 10% forward ROE.
Coming closely behind are Ann Joo Resources Bhd (non-rated) and Malaysia Steel Works (KL) Bhd (non-rated), followed by Southern Steel Bhd ('buy', TP RM2.50).
Meanwhile, Lion Industries Bhd (non-rated) and Perwaja Holdings Bhd (non-rated) scored the lowest. ' Hwang DBS Vickers Research, Jan 17
This article appeared in The Edge Financial Daily, January 18, 2011.
Company Name: KINSTEEL BHD
Research House: HWANGDBS
Southern Steel Bhd
(Jan 17, RM2.21),
Kinsteel Bhd
(Jan 17, 96 sen)
Sector's valuation remains attractive: Construction of the RM36 billion mass rapid transit (MRT) project is targeted to begin in July. With that, local steel demand is set to rise.
Pulling back the steel consumption trend from 1994 to 1997 ' when the government implemented high-impact projects such as KLIA, Petronas Twin Towers, Putrajaya city and the LRT lines (project values totalled RM54 billion) ' long steel consumption in Malaysia surged above 310,000 tonnes per month, higher than the average 270,000 tonnes per month.
Then, the sector traded at an average multiple of 1.6 times book value. Looking ahead, we believe the MRT project together with the LRT extension (estimated project values RM36 billion and RM7 billion'' respectively) could lift the demand momentum to the levels recorded in 1994 to 1997.
Hence, we believe the sector is poised for a re-rating given the positive contract flows. The sector's valuation remains attractive, currently trading below book at 0.8 times book value.
We advocate a 'buy' on Kinsteel. Our RM1.25 target price (36% upside) is based on 1.3 times FY11F net tangible assets (NTA). Kinsteel is a value buy, trading at one times NTA, with three-year earnings compound annual growth rate (CAGR) of 42% and 10% return on equity (ROE).
We upgrade Southern Steel to 'buy' (from 'hold') and retain our RM2.50 TP based on 1.2 times FY11F NTA. Southern Steel offers an attractive matrix of 13% ROE, 3% dividend yield and currently trades at one times NTA.
Our forecast for long steel consumption ex-MRT impact in 2011 is 3 million to 3.2 million tonnes, a conservative 5% growth from 2010.
Hypothetically, if steel comprises 10% of the MRT project value, it will translate to 1.6 million tonnes of steel requirement and effectively lift steel usage by about 8% per annum.
The two key risks: (i) Delay in execution. In our opinion, major delay is unlikely as the MRT project was earmarked as a vital component of the Economic Transformation Programme and is one of the prime minister's priority projects; (ii) Soft steel prices and rising iron ore cost affecting profitability. That said, we expect steel prices to improve in 2011.
On our scorecard, Kinsteel ('buy'; TP RM1.25) is ranked first. Kinsteel is an earnings recovery play with three-year net profit CAGR of 42% and 10% forward ROE.
Coming closely behind are Ann Joo Resources Bhd (non-rated) and Malaysia Steel Works (KL) Bhd (non-rated), followed by Southern Steel Bhd ('buy', TP RM2.50).
Meanwhile, Lion Industries Bhd (non-rated) and Perwaja Holdings Bhd (non-rated) scored the lowest. ' Hwang DBS Vickers Research, Jan 17
This article appeared in The Edge Financial Daily, January 18, 2011.
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