15 May 2009: OSK Said Buy Lion Industries. Target Price 1.90

27/2/2009 Quarterly rpt on consolidated results for the financial period ended 31/12/2008

Lion Industries lost some 45.9 million.

Lion Industries just reported its earnings.

Of course Lion Industries quarterly earnings caught my attention. It was one of OSK featured stock in its Long Steel research report dated 15th May 2009.

Look at the nice price target of 1.90 given by OSK.

Lion Industries closed at 1.35 today.


The above snap shot showed how Lion Industries, the stock, had performed the past 3 months.

It was just on 17th March 2009, Lion Industries was trading as low as 0.57.

And on May 15th 2009, Lion Industries soared to 1.27. And it doesn't take a genius to see that the stock had more than doubled what it was trading almost 2 months ago.

But yet, OSK insisted on making a huge buy recommendation on Lion Industries and gave it a rosy target price of 1.90.

Isn't this the typical buy high sell higher recommendation?

Today Lion Industries announced it lost more than 250 million for the quarter!

• For the nine months of the financial year, the Group posted a lower revenue of RM3.6 billion compared to RM4.8 billion a year ago. Demand for steel products of the Group was adversely affected by the global economic slowdown. In line with the steep plunge in global steel prices, the Group had recognised a provision for diminution in value of its steel inventories amounting to RM440 million.
  
  The Group recognised a negative goodwill of RM123 million arising from the acquisition of Silverstone Corporation Berhad by its listed subsidiary, Lion Forest Industries Berhad.
  
  After accounting for lower profit from the associated companies and lower finance costs, the Group registered a loss before tax of RM297 million for the period under review against a profit of RM407 million a year ago.

And yes, that negative goodwill from its so called acquisition of Silverstone. Yeah, some might call it bail-out. And since it's a group related transaction, there are many who simply aren't too impressed.

Anyhow, OSK said BUY woh.

Target Price of 1.90....

How now my dearest Brown Cow?

You mau?