OSK Steel Sector Stock Picks, Jul 2011


With M&As in the Malaysian steel sector reaching a feverish pitch and a few parcels of iron ore mining concessions potentially coming up for grabs soon, OSK is warming up to this sector, which has long been left out in the cold.

OSK has Trading BUY calls on Lion Industries, Ann Joo and Perwaja, and also upgrade Kinsteel to a NEUTRAL as these 4 companies are potential winners from these fresh theme plays. However, OSK maintain our NEUTRAL rating on Southern Steel and Malaysia Steel Works (Masteel).

Below are the target price/fair value and rating for selected stocks in steel sector.

Stock Price (RM) Target (RM) Market Cap (RMmil) Rating
Ann Joo 2.80 3.05 1,463.6 Tr. Buy
Kinsteel 0.70 0.73 677.6 Neutral
Lion Industries 1.81 2.73 1,299.4 Tr. Buy
Masteel 1.21 1.34 255.1 Neutral
Perwaja 0.93 1.05 520.8 Tr. Buy
Southern Steel 2.15 2.34 901.7 Neutral

Source : OSK Research

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