Steeling the limelight

Angela Tan - November 25, 2004
The Business Times 

HG METAL Manufacturing's latest results were spectacular and far exceeded analysts' expectations. Going forward, the company expects its fiscal first-half 2005 results to top last year's.
  
As if its fundamentals are not enticing enough, the company has decided to reward investors with its planned special dividend of half a cent per share in addition to its final dividend of one cent per share, plus a 1-for-3 bonus issue.
  
Since the start of this year, the supplier and stockist of steel products has seen its share price double from 31 cents in early January to 64 cents yesterday - a performance exceeding the benchmark Straits Times Index (STI), which has risen only 15 per cent over the same period.
  
Therefore, it comes as no surprise that the company has caught not only the attention of analysts, but also the interest of former Links Island Holdings chairman Winstedt Chong and his wife, whose purchases have triggered even more speculative interest in the stock.

Undervalued' stock

But even after such a strong performance, some analysts are still calling a buy on the 'undervalued' stock.
  
Local brokerage GK Goh sees potential upside of another 30 per cent from yesterday's closing price, putting a price target of 83 cents for the stock. And Kim Eng Research is keeping to its buy call in the belief that the 'share price is likely to be supported by low price earning (PE) multiple of 4.4 times FY05 earnings'.