KUALA LUMPUR: Maybank IB Research says there is better earnings clarity for Ann Joo Resources Bhd, and issued a “buy” call on the company, with a target price of RM3.20.
The research house explained that definitive safeguard duties for bars/rods have been determined at 11 to 14 per cent on a declining rate over the next 3 years.
It said in addition to there being limited dumping risk presently, given improved demand from China, the safeguard duties will protect the local steel industry from any massive import over the next three years.
As a result, Maybank IB Research said that it remains positive on AJR, given this improved demand-supply dynamics globally.
"The definitive safeguard duties for the import of bars and rods have been determined at 13.42-13.90 per cent for the first year, similar to the preliminary safeguard duties since Sep 2016. Subsequently, the safeguard duties will reduce to 11.10-12.90 per cent over the next two years.
"Including the present import duty of 5 per cent, the total duties for importing bars/rods would be 15-19 per cent for the next 3 years, until Apr 2020, enough to deter any influx of imports, in our view," the research house said in its report.