Maybank raises Ann Joo to buy
KUALA LUMPUR, May 9 — Maybank Research raised its call on Malaysia's steel products manufacturer Ann Joo Resources to buy from sell on the back of stronger demand growth in the Southeast Asian country.
"We are turning positive on Ann Joo due to pent-up local steel demand from 2H12 onwards and potential long-term high-margin vendor contract from Petronas," the broker said in a research note on Wednesday.
Ann Joo's trading arm supplies flat steel to Petronas for its fast-track oil and gas project, and is in the midst of securing a long-term vendor contract which would boost its trading revenue by 250 million ringgit.
Maybank added that local steel supply is likely to be tight from 2013 onwards due to the roll-out of mega infrastructure projects such as LRT extensions and the Sg Buloh-Kajang MRT.
Maybank raised Ann Joo's target price to 2.20 ringgit per share from 1.30 ringgit — Reuters