A handful of steel companies are expected to announce blowout earnings in the current reporting season, driven by higher ASP despite sluggish domestic steel demand. Cold rolled steel manufacturers could deliver more exciting earnings dynamics as input cost has plunged. Although steel prices have softened mom, we expect demand to significantly firm up by 2H17, hence sustaining prices. Maintain BUY on Ann Joo and we also note deepvalue stock, Choo Bee. Maintain OVERWEIGHT on the building materials sector.

Source: UOB Kay Hian Research - 15 May 2017