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Disclaimer:-Please note that all such analysis is provided by way of information only. All of the information was and should be taken as having been prepared for the purpose of reference only and that none were made with regard to any specific investment objective, financial situation or the needs of any particular person who may receive the analysis. Any recommendation or advice that may be expressed in or inferred from such analysis therefore does not take into account and may not be suitable for your investment objective.

Sunday, March 23, 2008

Ferro China Research Report

by DBS Vickers Securities (19 March)

We paid a visit to Ferro China's production plant in Changsu, Jiangu recently and had the opportunity to meet up with the group's management.

Ferro China's third reverse cold rolling mill is on track for commercial production by 2Q2008, while two more galvanising lines are expected to be up by 2H2008 year.

After speaking to management, we believe Ferro China's sales growth in 2008 is likely to be driven mostly by higher volume sales of cold-rolled steel coils, which are in short supply and commanding attractive margins.

In summary, we have cut our FY2008 earnings estimate by 2% and raised our Fy2009 earnings estimate by 3%.

At 4.1x FY2008 PER and 3.2x FY2009 PER, valuations are undemanding.

- Research Report by DBS Vickers Securities (19 March)
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