Kinsteel

Last few days i saw a good news:

The China Securities Journal had reported that China plans to raise its export duties on some steelproducts w.e.f. 1 Jan 2008. Citing some steel company officials, it was reported that export tariff onsteel billets would be raised to 25% from the current 15%. In addition, export duties on long andstrip steel products, and welded tubes would also be raised to 15% from the current level of 0%-10% respectively. China, the world's largest steel producer, had earlier scrapped its 13% exportrebate (VAT) on carbon steel welded tubes as of 1 July 2007. The export tariffs increases wouldcome amid increasing overseas dumping charges against China's massive steel exports at thesame time cut energy consumption and pollutant emissions.

With less steel export to here, we would expect the share price of steel might going on, who would benefit from this act? Sure is local steel maker, like Masteel(in over bought region), ornasteel, and not forgeting would be Kinsteel.

Kinsteel latest Quarter report shows EPS 68sen , and Q1 and Q2 are 43sen and 45sen respectively, assuming better result at Q4 EPS 70sen year end, the PE is stood at (1.39/2.26) = 5.7 , which is almost in par with Masteel and Ornasteel PE.

However, giving it high production and also, fund manager favourite, this counter indeed is a theme play counter. With the high growth in EPS, this counter might deserving PE 7 and above.

I would buy in with 5k allocated with this counter.