Director, Pearl Hill Advisors

Nicholas Tanner

Director

Pearl Hill Advisors

Equity Bottom-Up

<p>The business is clearly getting better, and should continue to improve over the next few years. The question now is how much is in the price. The shares are now on 1.4x book and on about 13x next year’s earnings, assuming the consensus operating profit of Y66bn (+10%) is about right (which we do). A year ago this consensus stood at Y73bn and has come gradually down as Olympic demand domestically has not fed through as fast as hoped and China has proved worse. Going forward, a rising coal price…</p>

The business is clearly getting better, and should continue to improve over the next few years. The question now is how much is in the price. The shares are now on 1.4x book and on about 13x next year’s earnings, assuming the consensus operating profit of Y66bn (+10%) is about right (which we do). A year ago this consensus stood at Y73bn and has come gradually down as Olympic demand domestically has not fed through as fast as hoped and China has proved worse. Going forward, a rising coal price…

Business Is Clearly Improving but Given the Recent Move and Valuation, We Would Not Rush to Buy.

Taiheiyo Cement

Business Is Clearly Improving but Given the Recent Move and Valuation, We Would Not Rush to Buy.