revalued down to $2.30

SONS OF GWALIA


Broker: CSFB


Rating: Downgrade to UNDERPERFORM


Price: Downgraded to $2.30 from $2.70


Comment: "A disappointing June quarter, a disappointing fiscal 2004 forecast, a downgraded fiscal 2005 forecast and tantalum valuation upside now limited to volume have reduced our expectation for Sons of Gwalia. With no compelling earnings driver and further gold weakness expected, we see little reason for owning the stock at its current price. We see further downside risk into the full-year result and disclosure of the strategic review conclusions. The company no longer appears to have a sleeper in its portfolio that can add value."

Broker: Goldman Sachs JBWere


Rating: Downgrade short-term recommendation to UNDERPERFORM from MARKETPERFORM


Earnings: Cuts fiscal 2004 EPS by 14.3 per cent, fiscal 2005 EPS by 42.6 per cent


Comment: "We still see the tantalum industry and Sons of Gwalia's position as the major supplier favourably. Near term contractual issues with Cabot (tantalum sales) and the lack of clarity on the earnings need to be resolved before the market will, in our view, be prepared to rerate the stock. We will review the recommendation once the market has digested the profit warning and again at the time of the fiscal 2004 result and Sons of Gwalia's Strategic Review in August. We see potential downside to the share price to less than $2 and this could create a trading opportunity."