STOCKWATCH:Angang New Stell to see a surprising final profit

Angang New Steel (0347) signed an agreement with a Germany Iron and Steel company on setting up a joint venture in Dalian with the whole investment totaling US$180(about HK$1.4 bln). Either side holds 50% stake. Angang can pay for the acquisition with its internal resources for it has HK$1.6 bln in hand. The JV is mainly engaged in providing faceplate of cars to Mainland automobile producer and panels of some house appliances, which had good performance last year, and was expected to help maintain the high growth rate of the group.The stock price of the company has slid by 20% recently over US accusing China enterprises of dumping. But the unfavorable news is expected to have been digested. In fact, its export revenue accounted for less than 5% of the companyˇ¦s total operating turnover, which can bring little influence. Its annual profit to be released next Tuesday is expected to be over RMB400 mln with 15 HK cents earnings per share. Recommend to buy the stock at HK$0.78 and sell at HK$0.76. The target price is set at HK$0.83.

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