CSCSTEL - 4Q Numbers Spring Back as Expected (OSK)

While we are not surprised that CSC Steel returned to the black in 4Q as a RM10m write-down in the preceding quarter helped to lower its feed material costs, we see opportunity to accumulate the stock. We are upbeat on the company’s 1HFY11 earning outlook and growing cash pile, which suggest that the board may continue to adopt a generous dividend policy. In view of the reasonable upside to our unchanged fair value of RM1.97, we upgrade our recommendation to Trading BUY.