Highlight News about HUAAN

Kenanga Research starts Sino Hua-An International (2739.KU) with Buy call and 96 sen target price; company is largest independent and 3rd largest coke producer in Shandong, commanding 10% market share. Expects high steel prices to continue to support high coke prices and margins; Hua An to construct 2 more ovens by May 2008 to boost capacity to 1.5 million tons/year in 2H08 and to 1.8 million tons/year by 2009.

Plans downstream expansion; eyeing 49% stake in Shandong's largest independent pig iron producer for MYR500 million, which will provide stable off-take for its coke. "Hua-An is trading at a substantial 83% discount to its Chinese peers. We expect with investors' increase familiarity and proven execution, the discount factor will be narrowed," says Kenanga.

Sino Hua-An (2739.KU) +14.5% at 75 sen in heavy volume, off intraday high of 77 sen; dealer says stock's sharp rise in share price due to buying interest from funds. Hua-An is the largest independent producer of metallurgical coke in the Shandong province, China and is currently running at full capacity of 1.2 million tons. Even at 75 sen, the stock is trading at undemanding FY09 PER of 5X vs Chinese peers trading 15X-30X, he adds. Resistance at 90 sen (200-day moving average).