Press Release Source: Fushi International
Dutton Associates Announces Investment Opinion: Fushi International Strong Speculative Buy In Update Coverage By Dutton Associates
Tuesday October 10, 6:37 pm ET
EL DORADO HILLS, Calif.--(BUSINESS WIRE)--Dutton Associates continues its coverage of Fushi International (OTCBB:FSIN - News) reiterating a Strong Speculative Buy rating and lowering our price target to $11.64. The 10-page report by Dutton senior analyst Stanley Ng is available at www.jmdutton.com as well as from First Call, Bloomberg, Zacks, Reuters, Knobias, and other leading financial portals.
The oil-led visible correction of major commodity prices since mid-August due to more evidence of slowing U.S. demand had triggered concerns over the outlook for global metal and metal-related stocks. As the market sentiment and outlook of copper prices turn negative and Fushi's product prices are highly correlated to copper prices, we believe it is prudent to reassess our earlier assumptions on Fushi with respect to the average selling price of its CCA products and the possible negative impact on volume sales and margins. We concur with management's view that the decline in copper prices should have limited impact on the demand for Fushi's CCA products, given that Fushi's products are generally priced at 40-50% discounted to pure copper wire products. By changing its product mix to produce higher price CCA-M and CCA Thin products, we believe the higher working capital requirement to support higher sales will restrain Fushi's aggressive capacity expansion. We have lowered our average product selling price and volume sales assumptions and cut our earnings forecasts beginning in 3Q06 through FY2008. Therefore, we believe it is prudent to apply a less aggressive P/E valuation to determine the price target of Fushi. Based on a 12x P/E for FY2006, our 12-month price target of Fushi is $11.64. With 60% upside potential, we maintain our Strong Speculative Buy recommendation on the stock.
About Dutton Associates
Dutton Associates is one of the largest independent investment research firms in the U.S. Its 31 senior analysts are primarily CFAs and have expertise in many industries. Dutton Associates provides continuing analyst coverage of over 140 enrolled companies, and its research, estimates, and ratings are carried in all the major databases serving institutions and online investors.
The cost of enrollment in our one-year continuing research program is US $39,500 prepaid for 4 Research Reports, typically published quarterly, and requisite Research Notes. The Firm does not accept any equity compensation. We received $35,000 from the Company for 4 quarterly Research Reports with coverage commencing on 06/19/2006. Our principals and analysts are prohibited from owning or trading in securities of covered companies. The views expressed in this research report accurately reflect the analyst's personal views about the subject securities or issuer. Neither the analyst's compensation nor the compensation received by us is in any way related to the specific ratings or views contained in this research report or note. Please read full disclosures and analyst background at www.jmdutton.com before investing.
Contact:
Dutton Associates
John M. Dutton, 916-941-8119
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Source: Fushi International
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