Friday, January 11, 2013

STX PO

STX PO: The counter is DB's next top pick after CSD (1138 HK), and STX PO is downgraded to HOLD with a TP of $5.78. DB noted that the Group is now trading at 0.9x 2013E P/B, which the house think is close to fair value. DB notes that STX PO is the most leveraged to rate rises. There is also the possibility that the STX group might sell the company to a financially stronger group which would have a positive impact on investor perception of the stock. The house also have forecast a smaller 4Q12 net loss of US$60m from US$89m in 3Q12 for STX PO because of a 13% QoQ increase in 4Q12 average BDI, as well as the successful implementation of several cost cutting measures by the company. Other companies on SGX with Dry Bulk exposure are Courage Marine (trading at 1.1x P/B) and Mercator Lines (trading at 0.42x P/B)

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