Below expectations. 9M11 net loss of RM19m (9M10: RM11m net profit) is significantly below our full-year net profit forecast of RM10m and consensus' RM12m. Though near-term earnings will remain weak, we maintain our Hold rating as the potential official award of the iron ore mine concession to Perwaja is a major positive re-rating catalyst. We now project 2011 net loss of RM22m and cut 2012-13 EPS forecasts by 20-21%. TP is lowered to RM0.49 (-20%) as we peg Kinsteel at trough P/BV valuation of 0.55x (from 0.7x), similar to 2009.

Maybank research (29 November 2011)

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