SIAS forecast FY09 growth in revenue will slow down to 4.6% after growing at 52.6% in FY07 and FY08. The global financial and economic turmoil is
expected to dampen global demand for steel products whereas local demand
should be sustained by the project pipelines mentioned above. Demand from
private property construction is expected to ease but Hupsteel does not have much exposure to that segment.

�� Steel prices are expected to continue softening representing a risk, in the form of inventory write-down, to bottom-line.

Hupsteel peers are trading at an average PE09 of 2 times. While they believe the softening of steel prices is a threat to inventory values, a valuation of two times forward PE is unrealistic. Dividend yield of Hupsteel is also in the double digits. The counter traded between a PE of 3 times and 9.4 times prior to the exceptionally volatile recent month. Due to softening of steel prices, we use the trough valuation of 3 times to reach a target price of $0.21. Hold.