Ann Joo Resources

Ann Joo Resources

Postby winston » Fri Oct 06, 2017 10:17 am

not vested

Local steel bar prices surged to a multi-year high of RM2,642/MT ytd (+6.2% mom).

We believe that the local steel bar prices will sustain and potentially go higher when local
steel demand picks up on various mega and infrastructure projects. Also note that China
billets continue to trade at premium and the price gap with local steel bars is widening.

Share Price Catalyst
Significant improvement in local steel demand.
Rise of local steel ASP to a multi-year high.
Industry reform in China leading to tight steel supply and sustained prices.

Source: UOBKH
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Re: Ann Joo Resources

Postby winston » Wed May 30, 2018 8:19 am

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Ann Joo Resources Berhad
Target Price: RM3.15 (Buy)


ANNJOO’s 1Q18 core profit of RM60.3mn came in within expectations, accounting for 26.7% and 26.6% of ours and consensus full-year estimates.

After revising the share base and rolling forward our valuation base year to CY19, we revise the target price from RM3.25 to RM3.15, based on 7.5x CY19 EPS.

Maintain BUY call on ANNJOO given its effective cost management, which we think would enable the company to sail through the negative headwinds.

Source: TA Securities

http://eas.taonline.com.my/research/Dco ... 180528.PDF
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Re: Ann Joo Resources

Postby winston » Mon Jun 25, 2018 10:40 am

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Ann Joo looks abroad to tackle slumping domestic demand

by Justin Lim

KUALA LUMPUR: Ann Joo Resources Bhd has started to look more closely at export markets to mitigate slowing local demand for steel products, in the wake of the large scale back of infrastructure projects in the country by the new Pakatan Harapan administration.

Its managing director Datuk Lim Hong Thye said the group would keep to plans to ramp up its crude steel production to 850,000 tonnes this year from 700,000 tonnes last year as this had been based on an earlier anticipation of strong domestic demand before a number of projects including the Kuala Lumpur-Singapore high- speed rail and Klang Valley mass rapid transit Line 3 or circle line had been scrapped or deferred by the government to cut costs.

Lim said the company would look at Southeast Asia, particularly Thailand and Indonesia, for two main reasons. According to him, firstly, the demand for steel in the two countries is high.

Secondly, the group has a cost competitive advantage over steel producers in the region because it can optimse production costs by adopting the hybrid blast furnace and BF-EAF (blast furnace-electric arc furnace) technology.

But, he conceded it is still early days yet to gauge export demand. “At the moment, we have just started contacting all the foreign buyers to gauge their price level and interest, but this is more for preparation rather than actual action.”

But the group is hopeful the review will end up benefiting local players in the longer run. “Since the dissolution of Parliament [on April 6] Ann Joo has seen its business activities slow more sharply than expected,” Lim told The Edge Financial Daily in a recent interview.

For now, the group expects second-quarter margins to come under more pressure than originally anticipated because of the change in government, as well as weak domestic demand “as people are holding back”.

The second quarter will also be impacted because of the month-long Ramadan fast and Hari Raya Aidilfitri festivities.

He stressed competition from Chinese players had affected many industries, including the steel industry, noting in from 2013 to 2015 , the pricing of Chinese steel products had been “ridiculous”.

On the group’s prospects, Lim said that key factors including productivity and the cost of raw materials are within its control.

“Compared with last year, our selling price [for steel rebar] is still higher and our productivity is improving while raw material costs came down to more reasonable levels, particularly for coal and iron ore.”

The price of iron ore has dropped to US$64 per tonne, compared with its peak of around US$80 a tonne at the end of last year.

And coking coal prices came down to US$185 per tonne from US$240 to US$250 at the end of December.

Ann Joo has promised to keep to last year’s dividend payout even though it is not certain how profitable it will be this year.

“In fact, our financial position is strengthening compared with the past. Unless there are changes to external factors, we will try to have the same dividend payout as last year, which is about 45% to 47% [of profits].”

Lim said the group’s gearing ratio has reduced to 0.58 times for the first quarter of financial year 2018 (1QFY18), against 0.64 times in 4QFY17.

According to him, the group will consider a share buy-back as the current share price undervalues the company.

Lim noted Ann Joo’s first-quarter profit amounted to RM61 million and even after factoring in a discount because of the slowdown, its current price of about RM2.11 pegs the stock at a low single-digit price earnings.

Lim, who is also the president of the Malaysian Iron And Steel Industry Federation, said despite the uncertainties in the economic landscape, Ann Joo is actively looking to expand its upstream and downstream segments.

For the upstream segment, Lim said it is in the “exploration stage”, while it is looking within Southeast Asia to expand its downstream segment.

Source: The Edge

http://www.theedgemarkets.com/article/a ... tic-demand
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Re: Ann Joo Resources

Postby winston » Thu Sep 27, 2018 8:59 am

A favourable award

Maintain BUY

We expect the positive outcome of its arbitration case, leading to an Additional Award, to improve sentiment on the stock.

We expect the net gain from the award to strengthen its balance sheet and reduce interest
cost.

That said, there is still uncertainty in the timing of payment of the award.

No change to our earnings forecasts for now.

Maintain BUY with an unchanged TP of MYR2.40 on 8x FY18 PER (-0.5SD to mean).

Source: Kim Eng

https://factsetpdf.maybank-ke.com/PDF/1 ... dd5063.pdf
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Re: Ann Joo Resources

Postby winston » Tue Oct 16, 2018 2:56 pm

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HLIB Research starts coverage on Ann Joo, target price RM1.82

KUALA LUMPUR (Oct 16): Hong Leong IB Research has initiated coverage on Ann Joo Resources at RM1.65 with a “Hold’ rating and target price of RM1.82 and said Ann Joo is the largest steel counter listed on Bursa and is often regarded as one of the lowest cost producers of long products in the steel industry.

In a note today, the research house said while Ann Joo has a defensive cost structure and is a beneficiary of China’s local supply cuts coupled with narrowing domestic-import price gap, this is offset by the weak domestic construction outlook post GE14 and the risk of China expanding its overseas production.

“We initiate coverage on Ann Joo with a Hold recommendation and target price of RM1.82 based on 8x P/E multiple pegged to FY19 EPS,” it said.

Source: The Edge

http://www.theedgemarkets.com/article/h ... rice-rm182
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Re: Ann Joo Resources

Postby winston » Fri Feb 22, 2019 4:09 pm

not vested

Dec 3, 2018

Challenging industry dynamics

Downgrade to HOLD with a lower TP

3Q/9M18 results were below expectations and we have cut our FY18/19/20 earnings forecasts to factor in margin pressure.

We expect earnings will remain dampen in view of uncertainties in domestic steel demand and
competitive ASPs.

Our new TP is MYR1.35 (-MYR1.05) after our earnings cut and pegging on a lower FY19 PER of 6x (-1SD of 5-yr avg historical fwd PER; previously -0.5SD).

Downgrade to HOLD.

Source: Kim Eng

https://factsetpdf.maybank-ke.com/PDF/1 ... b408b7.pdf
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Re: Ann Joo Resources

Postby winston » Thu Feb 28, 2019 10:35 am

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Ann Joo Resources (AJR MK)
4Q18 above expectations


Maintain HOLD

Stronger 4Q18 net profit (+>100% QoQ) was lifted by investment tax allowance and tax incentives for higher export sales.

The results were above our expectations.

We revise higher our FY19-20E earnings and we introduce FY21 forecast.

We think earnings momentum could sustain on improving domestic outlook and global supply disruption in iron ore. That said, valuation is fair.

Maintain HOLD with a revised TP of MYR1.54 (+MYR0.19) on unchanged FY19 PER of 6x (-1SD of 5-yr avg historical fwd)

Source: Maybank

https://factsetpdf.maybank-ke.com/PDF/1 ... f4b436.pdf
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