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DJ MARKET TALK: Angang Off 1.5%; GS Upbeat Despite Margin Concern
1146 [Dow Jones] Angang Steel (0347.HK) down 1.5% at HK$11.78 as investors likely focusing on likely margin pressure in 3Q09, while ignoring company swinging to 1H net profit of CNY2.75 billion.
Still, with China steel mills raising product prices recently, 4Q recovery expected.
Goldman Sachs expects margin pressure to emerge in 3Q on lower steel product prices combined with production cost likely to inch up on higher raw material prices, but keeps positive view on Angang on view more sustainable steel product prices in 4Q10 on better supply discipline, valuation attractive.
Keeps Buy rating, HK$14.50 target.
Source: Dow Jones Newswire