This volume was last seen on 2 May 07 and ran up to the high of $2.43. Can it happen again? Maybe if we believe the below report from DBS Group Research
More Reasons to Buy FerroChina
Story: We highlight a few key points that we believe can help FerroChina re-rate significantly over the next three to six months.
Point:
Firstly, a potential bid for steel-maker Delong by the Evraz Group at over 11x FY08 earnings suggests that FerroChina, currently trading at 5.3x FY08 PER, is significantly undervalued and also highlights the latter as another potential takeover target for larger steel companies.
Secondly, we believe the Group’s fundamentals remain strong and that it should report a record earnings year in FY08, boosted by full consolidation of recently acquired SuperbTeam’s numbers. Our forecast net earnings for FRC in FY08 is RMB1,138m compared to RMB427m for FY07F, translating to a fully diluted EPS growth of 28% for this year. Furthermore, we expect FerroChina to announce a good set of 4Q results next Thursday, 28 Feb, which should help further reassure investors of its strong growth prospects, as well as the positive contribution that can be expected from having fully acquired SuperbTeam.
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