Cosmosteel

Cosmosteel: 1Q13 revenue increased 15.3% y/y to $45.3m, gross profit margin decreased by 7.8ppts from 24.1% in 1Q12 to 16.3% in 1Q13, mainly attributable to stiff competition- resulted in a decline of 52% in earnings to $1.8m. No dividends were declared. The increase in revenue is mainly due to a new line-pipe project secured from an existing customer in the Energy Sector. The Energy Sector remains the main contributor to the revenue generated in the period. Mgmt expect market conditions to remain challenging and profit margins to continue to be under pressure, and stated that assessing project returns will be a focus to maintain its overall profitability in the current financial year. Company is trading at 15x P/E, 1.1x P/B and historical dividend yield of 3.97%.