Stock Name: ANNJOO
Company Name: ANN JOO RESOURCES BHD
Research House: AMMB



AmResearch Sdn Bhd is projecting Ann Joo Resources Bhd's net profit for the financial year 2011 to expand by 59 per cent year-on-year to RM244 million.

This is largely backed by maiden contributions from its new blast furnace amid an imminent steel price upcycle, it said in its research note today.

AmResearch has maintained a "buy" call on Ann Joo with a lower fair value of RM4.02 per share from RM4.20 previously.

Ann Joo recorded a nine months financial year 2010 net profit of RM123 million against RM9 million a year earlier.

"While we expect a better performance in the fourth quarter financial year 2010, we have clipped the financial year 2010 net profit forecast by 13 per cent to RM154 million to account for some slight hiccups in the roll-out of its new blast furnace.

"But, hot commissioning works, are still on track to kick off by end of this year. More than 90 per cent of the plants' equipment/structures have been installed," AmResearch said.

Ann Joo is seeing an imminent upswing in steel prices in the fourth quarter financial year 2010 given low global inventories. It also revealed that export enquiries have resumed since two weeks ago.

With its steel-making unit running at full capacity, AmResearch said Ann Joo is also well positioned to benefit from a revitalisation of domestic steel demand in fourth quarter financial year 2010. -- Bernama