Piper Jaffray Downgrades Fushi Copperweld (FSIN) to Neutral
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Piper Jaffray downgrades Fushi Copperweld (NASDAQ: FSIN) from Buy to Neutral and lowers their price target from $33 to $13.50.
The firm also lowers their FY08E EPS from $1.55 to $1.35, which is below management's revised guidance range of $1.40-$1.45 (excluding one-time items). Piper Jaffray also reduces their FY09E EPS from $2.20 to $1.80.
The downgrade comes after the company's Q2 results and FY08 guidance revision. Piper Jaffray highlighted that the company’s sales growth is expected to be pressured in 2H08 due to "delays in telecom infrastructure spending, stemming from industry consolidation occurring within the PRC." Also, in relation to its softer 2H08 outlook, FSIN management “cited work stoppages in the PRC tied to electricity/coal shortages and the Olympics."
Overall, the Piper Jaffray said, "While over time, we believe that Fushi will be successful in expanding its presence in the utility and auto markets in China, we believe this sales cycle may prove to be longer than anticipated – leading to moderating growth in the near-term when combined with continued uncertainties in the telecom market."
Fushi Copperweld, Inc. is a Chinese manufacturer of bimetallic wire & cable products for the telecommunication, utility & power, and industrial markets.
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