KGI Securities has kept its “buy” call for Fortress Minerals with a target price of 60 cents on the back of rising iron ore prices.
In its March 7 note, the brokerage notes that iron ore prices rose for the week as the war in Ukraine as well as recovering Chinese demand drove prices higher. Iron ore on the Singapore Exchange April 62% Fe Futures settled near US$160 per tonne, it adds.
“Chinese port data showed that iron ore inventory slipped 430,000 tonnes to 153.6 million tonnes. Blast furnaces have been building stocks as restrictions around the Winter Olympics have eased. The ongoing war and limited prospect for an immediate resolution may mean that iron ore prices may be supported for some time,” the brokerage wrote.
Fortress Minerals reported disappointing 3QFY22 results, where its net profit declined 35% y-o-y to US$2.8 million due to lower selling prices. The company achieved an average realised selling price of US$87.44 versus US$110.06 in the previous corresponding period. KGI expects the decline to reverse in the next quarter thanks to the rising iron ore prices.
Fortress Minerals has prompted a query from the Singapore Exchange Regulation (SGX RegCo) after its share price surged to 49.5 cents as at 2.16pm on March 4, 12.5% higher than the last-closed price of 44 cents.
In its response issued the same day, Fortress Minerals said it is not aware of any information not previously announced concerning the company, its subsidiaries or associated companies which might explain the trading. The company added that it is not aware of any other possible explanation for the unusual price movements of its shares.
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As at 9.52am, shares in Fortress Minerals are trading 3.5 cents higher or 6.93% up at 54 cents.
