Thursday, January 3, 2013

STX PO

STX PO: 27% shareholder STX Corp has hired two invmt banks as advisers on the sale of its stake in STX PO. Deutsche believes this has been the main driver of the 42% share-price appreciation of STX PO since 1 Nov 2012 as investors are hoping for a financially stronger parent. STX PO is expected to announce 4Q12 results in mid Feb ’13. Deutsche forecasts a narrowing of the net loss from US$89m in 3Q to US$60m in 4Q, following the 13% QoQ improvement in BDI rates, coupled with several cost cutting measures, though it notes BDI may ease before the Chinese New Year on seasonality. At 0.5x 2012E and 2013E P/B, Deutsche views the stock as one of the cheapest in the region. Keeps at Buy with TP KRW 6,500 (S$7.47).

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