OSK On Sino Hua An

Posted the other day.. Update on Sino Hua An Losses

I made the following remarks:

• As mentioned in the early posting, OSK's previous earnings forecast for Sino Hua An was much, much higher than KN, at rm 100.3 million. I am disappointed because I have yet to see OSK make an update on Sino Hua An's earnings today. I wonder... why... hmmm....

Today, OSK finally loaded their report on Hua An.

They downgraded their earnings forecast by a whopping 62.9%!!!

Totally unreal.

And more incredible if you take their Jan earnings forecast of 120 million into consideration.

Here's OSK recommendation.

• Downgrade to NEUTRAL. The exceptionally poor earnings visibility prompts us to trim our earnings forecast for FY10 and FY11 by 62.9% and 53.8% respectively.

So from an earnings forecast of 120 million in Jan 2010, it was lowered to 100 mil on 1st March 2010 and now to a mere 37.2 million.

So in a span of 4 months, the earnings forecast was lowered by a whopping 82.8 million!

Holyyyyyyyyyy singing cow!

And it continued....

• The murky outlook also suggests that we switch our valuation to PBV, which reduces our fair value from RM0.70 previously (7.8x PER FY10 EPS) to RM0.40, based on 0.6x FY10 BVS.

Aikkkkkkkkkkkkkkksssss!

So from using a PER valuation, valuation is now done using PBV!!!!!!!!!!!!!!!!

Holyyyyyyyyyyyyyyyy cow!

Go figure out why I like OSK so much!

• We downgrade our call to NEUTRAL from Buy previously.

Ahem.

Let me see if I get this correct.

On January 2010: Rising demand to benefit Sino Hua-An. Sino Hua An was at 52 sen. OSK called it a buy with a Target price of 87 sen.

On 1st March, Sino Hua An was 48.5 sen, OSK gave it a buy with a Target Price of 70 sen.

Today, Sino Hua An is at 38.5 sen. OSK calls it Neutral with a target price of 40 sen.

WOW!