TA Securities expects CSC Steel’s sales volume to pick up in the upcoming quarters
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00:00 CSC Steel Holdings is out struck in focus this Tuesday morning.
00:06 TA Securities upping its recommendation on the stock to buy from hold,
00:10 with a target price of RM1.38.
00:13 The counter closed yesterday at RM1.24.
00:17 In its note, TA said,
00:18 "Excluding the provision for the inventories written down,
00:21 CSC's nine-month FY23 core profit of RM39.4 million
00:26 came in within expectations,
00:28 accounting for 70.1% of its full-year estimate.
00:32 Year-on-year, the figure is 15.5% higher,
00:35 although revenue was 11.6% lower,
00:38 largely due to lower average selling prices."
00:41 Overall, despite the global steel prices remaining lackluster,
00:45 TA expects sales volume to pick up in the upcoming quarters.
00:49 This is in tandem with the increasing domestic demand
00:52 from the construction and industrial sectors.
00:54 Meanwhile, MITI's two-year moratorium for the industry
00:57 will help to resolve some of the long-standing issues,
01:00 such as overcapacity and steel dumping.
01:03 The Research House updates target PE multiple for CSC
01:06 from eight times to nine times,
01:08 as it is more optimistic about the industry's long-term outlook.
01:12 Now what does the ST say?
01:14 According to the latest Bloomberg data, it's just TA,
01:17 so that's one buy call, target price RM1.38.
01:21 CSC last closed at RM1.24,
01:24 so that implies a potential return of about 11%.
01:27 ♪