FRC - Punting @ 0.655

Punters at work. Joined them too late?

Punting this damned old news?

Why FRC dropped so much despites good earning?

The Board of Directors of FerroChina Limited (the “Company” or “Group”) is pleased to announce that Changshu Xingyu Advanced Building Material Co., Ltd (“Xingyu”) has completed the installation of its recrystallation annealing production line and tension levelling line. With these equipments, the Group will be able to sell additional product range, capture higher value add product value chain and improve the overall profitability going forward. The output of these equipments will be used as feedstock for other subsidiaries of the Group until the cold reversing mill of Xingyu is ready.

Further to the Announcement on 25 April 2008 and 20 August 2008 regarding the appointment of Merrill Lynch as our financial advisor to assist with a review of potential strategic alternatives, the Company wishes to update that the Company has identified a potential investor, which has signed a Confidentiality and Non-Disclosure Agreement with the Company and is currently carrying out its due diligence investigations on the Company and its subsidiaries.

The Company and potential investor had entered into several discussions and negotiations on the terms of investment, following which a draft Term Sheet has been drawn up for the parties’ review.

However, the parties have to date not signed nor concluded any Term Sheet or Memorandum of Understanding. Hence, the proposed investment by the potential investor is still under negotiations pending the latter’s completion of its due diligence investigations.

Meanwhile, Shareholders are advised to exercise caution in trading their shares. There is no certainty or assurance as at the date of this Announcement that the proposed investment by the potential investor will be concluded. The Company will release further announcement to update Shareholders should there be further development regarding the proposed investment by the potential investor

FerroChina

FRC has been sold down after releasing strong Q1 result. Why like that?


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SINGAPORE, May 2 (Reuters) - Steel-maker FerroChina
rose as much as 4.9 percent after Hong Kong's South China Morning
Post reported that Australia and Russian firms are eyeing at
least a 20 percent stake in the China-based company.
Shares of FerroChina, which makes galvanised steel, hit an
intraday high of S$1.49 with over 4.8 million traded.
The newspaper report, which did not name its source, said
FerroChina has attracted interest from Australia's BlueScope
Steel and Russian firms including Evraz Group ,
part-owned by Russian billionaire Roman Abramovich, to buy a 20
percent stake in the Chinese company.
But the unnamed source said FerroChina may receive a large
offer and sell more than one-fifth of the firm.
"Some of the real acquisitive guys may come in with a huge
bid and the whole company could get sold," the newspaper quoted
the unnamed source as saying.
The report follows an announcement from FerroChina last month
that it had hired Merrill Lynch as its strategic advisor.
In March, FerroChina executive director Nelson Fong told
Reuters that the company would consider long-term alliances or
strategic investments by outside parties, but he said the owners
would want to retain some control.

FerroChina 1QFY08

FerroChina continues strong performance, posting
triple-digits revenue and earnings growth for 1QFY08

Will it run up on Monday?

Ferro China": Good run +15.3% on 40.5M

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.

FRC

Bought FRC on 12 Feb @ 1.25. It has then stopped moving up and consolidated.