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Asahi Glass Jumps on Daiwa Upgrade for Profit Recovery Outlook

Post Time:May 19,2009Classify:Company NewsView:507

Asahi Glass Co. soared the most in 19 years in Tokyo trading after Daiwa Securities Group Inc. gave its top rating to the world’s No. 1 maker of glass substrates for plasma-display panels on the potential for a profit recovery.

Asahi Glass rallied 14 percent to 702 yen as of 9:40 a.m. on the Tokyo Stock Exchange, the steepest advance since October 1990. The shares were boosted to “buy” from “neutral” by Daiwa analyst Yusuke Ando.

The company’s 5.9 billion yen ($61 million) operating loss for the first quarter was about a third of what management had projected. Asahi Glass is targeting a full-year operating profit of 30 billion yen, while Daiwa expects 60 billion yen.

“Liquid-crystal display glass earnings are coming in above projections,” the analyst wrote in a Japanese-language note dated yesterday. Combined with restructuring in its building-use glass business, “there’s a strong chance that will cause a revaluation of the shares.”

The stock could climb to between 12 and 13 times estimated earnings for the year ending in 2010, driving the price to as high as 868 yen, Ando wrote.

Source: BloombergAuthor: shangyi

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