福源金属 （HG Metal） 评级：表现优于大市 目标价：61分

（2008-03-29）

By CHEW XIANG from Business Times 18 Mar 2008

Mr Wee: 'This MOU will add to HG Metal's already expanding list of international steel suppliers. The current demand for steel products remains strong due to increased construction and shipbuilding activities.'

Under the MOU, Novo will supply HG Metal with at least 156,000 tonnes of steel products per year, about 9 per cent of Novo's reported steel supply.

The MOU is not legally binding and is subject to a definitive agreement to be executed within three months, the companies said in a joint statement.

Wee Piew, chief executive officer of HG Metal, said: 'This MOU will add to HG Metal's already expanding list of international steel suppliers. The current demand for steel products remains strong due to increased construction and shipbuilding activities.'

The trading volume for semi-finished and finished steel products is expected to rise 20 per cent to 480 million tonnes this year, from 400 million tonnes in 2006, according to the International Iron and Steel Institute. Steel prices have soared, driven by rising demand, higher prices for iron ore and coking coal and falling stocks.

HG Metal reported a 130.5 per cent increase in net profit to $8.5 million for Q1 2008.

The company said a construction boom and rising steel prices helped boost margins.

Novo Group, incorporated in Hong Kong in 2005, counts HG Metal and Lee Metal, another locally listed steel company, as customers.

Novo's backdoor listing on the Singapore mainboard is being completed and trading is targeted to begin on April 2.

For the first five months of FY2008, it posted a net profit of US$5.7 million on sales of US$211.5 million.

Chairman Dicky Yu said in an interview last week that the company has in place agreements to secure 1.76 million tonnes of steel products a year.

Rewards shareholders with 1-for-3 bonus share issue, final dividend of

1 cent and special dividend of 0.25 cent