ShengdaTech (NASDAQ:SDTH) Costs Rise in Fourth Quarter

ShengdaTech (NASDAQ:SDTH) had its EPS estimate lowered for full year 2010, along with their price target, by Global Hunter, citing higher operating costs and interest expenses.

Global says, "We maintained our FY10 revenue estimate at $133MM, but lowered EPS from $0.52 to $0.49 due to higher operating expenses and higher interest expense in Q4 due to the CB offering. We lowered our FY11 revenue projection from $157MM to $150MM due to the delay of capacity expansion at Zibo, and lowered our EPS estimate from $0.62 to $0.59 on lower revenue and higher interest expense. We expect an output of approximately 310k MT in FY11 with an ASP of $485. We established FY12 estimates, projecting revenue of $170MM (14.5% YoY, an estimated 350k MT output with an ASP of $485) and EPS of $0.70. We expect ASPs to remain relatively stable and gross margin at 39%-40% in the FY11-FY12 period."

Global Hunter Securities reiterates a "Buy" rating on ShengdaTech (SDTH), which closed Tuesday at $4.59, losing $0.13, or 2.75 percent. Global cut its price target on ShengdaTech from $8.50 to $6.00.