Upgrade to BUY. Share price has fallen by 30% from its peak in Feb 2012 and is at its 3-year low. More importantly, we expect Kinsteel to turnaround in its upcoming 1Q12 results on lower iron ore cost and better local sales. We maintain our forecasts and TP of MYR0.49 (0.7x P/BV). The stock now offers upside of 18%, hence we upgrade Kinsteel to a BUY. At current share price, the stock trades at 0.58x P/BV, close to its trough of 0.5x in 2009 and below its mid-cycle P/BV of 0.9x.

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Source: Maybank Research - 14 May 2012