Local steel prices strengthened to a record high of RM2,488/MT in Aug 17, up 14.2% mom. We remain bullish on the sector and expect earnings in 2H17 will be significantly better than 1H17’s, given the strong steel prices and expectedly higher steel demand largely coming from mega and infrastructure projects. We believe investors should also focus on notable valuation and share price laggards such as Choo Bee, CSC Steel and Leon Fuat. Maintain OVERWEIGHT. Top pick is Ann Joo.

Source: UOB Kay Hian Research - 18 Sept 2017