About a year ago, Core Pacific-Yamaichi revised upwards its target price for steel-maker Angang New Steel, the mainland's second-biggest steel producer, to HK$1.97 from $1.65 and maintained its buy recommendation. Long steel prices had increased more than expected in the second quarter of the year due to strong demand from mainland infrastructure projects. Demand from the west to east pipeline, power transmission and the Three Gorges project should support steel prices in the second half, the broker said. Sales volume had been strong. The company's second line of cold rolled steel began production in May, a month ahead of expectations. Capacity would be increased to 1.6 million tonnes from 1.4 million tonnes. Trading at a price/earnings ratio of seven times on the forecast for 2003, at 5.6 per cent yield and price-to-book ratio of 0.69 times, the counter was not expensive. Given the better-than-expected long product prices and a conservative earnings estimate, the broker believed the risk was on the upside. The revised price target of $1.97 would give an upside of about 12 per cent. The broker said that since it initiated coverage of Angang on April 30, the counter had surged 44 per cent. It was trading at $1.82 about a year ago. In April Angang New Steel reported a 139.51 per cent increase in net profit for last year to 1.43 billion yuan, driven primarily by higher product prices. Turnover rose 35 per cent to 14.48 billion yuan. On Friday the counter closed at $2.95.