Stock Name: HUAAN
Company Name: SINO HUA-AN INTERNATIONAL BHD
Research House: OSK



OSK Research Sdn Bhd has recommended a "buy" on Sino Hua-An International Bhd with the target price revised up to 47 sen from 40 sen after China moved to eliminate small coking firms.

In a research note today, OSK said China has eliminated small coking firms with a combined capacity of 84.12 million tonnes per year last year, slightly above the 80 million tonnes per year targeted during the 11th Five-Year Plan period (2006-2010).

"The further elimination of plants with 25.87 million tonnes per year coking capacity is indeed good news for Sino Hua-An, but we reckon the permanent closure would likely come in below the figures reported by the press," it said.

OSK said its view was backed by the possibility of some companies being impacted by this measure might have obtained approvals to set up newer and more efficient coking plants.

It said this news may spur interest in coke producers' counters as the full impact of this development remained uncertain and might take a while before any positive impact to Sino Hua-An's profit and loss was reflected.

The research house also expected the company to return to the black in the second quarter, although the upside might be capped by the subsequent weakening of the steel market.

OSK said Sino Hua-An was set to announce its results on August 24. -- Bernama