Morgan Stanley maintained an overweight rating of 1051.HK, with a target price of HK $0.73, citing risk aversion to gold, the company's growth potential and low cost of capital.

The bank estimates that the current share price of International Resources reflects the price of gold at less than $800 an ounce, while the company is expected to produce 250000 ounces of gold in fiscal 2013 at a cost of less than $250 an ounce.

The bank points out that international resources have fallen more than 40 per cent in the past three months, while the Hang Seng index has fallen 23 per cent. The bank believes that investors have ignored the gold business and growth potential of international resources, and that some investors still doubt the company's ability to start production in time; if the company can successfully start production in March 2012, it should be able to change investors' perception of international resources: from a lossmaking start-up to a gold producer.

International resources closed up 1.4 per cent at HK $0.355.