Report
EUR 61.86 For Business Accounts Only

Earnings beat again, better sector outlook

​Previously, we were concerned about CSC regarding the 1) potentially weak quotation steel prices and 2) strength of supply-side reform in China. However, several positive signs such as 1) higher than expected ASP increases and 2) execution of supply-side reform have relieved our concerns. As such, we revise up our earnings forecast and expect CSC’s ROE to return to 5-6%, as in 2011-14 (P/B trading at 1.3-1.6x). Thus, we set our target multiple at 1.3x 2017F P/B (vs. 1.2x 2016F P/B previously) to reflect the better earnings outlook.

Underlying
China Steel Corporation

China Steel is engaged in the manufacture and sale of steel products and machinery, transportation and electrical machine engineering contracting. Through its subsidiaries, Co. is engaged in the provision of transportation services; the manufacture and sale of aluminum products and other non-ferrous metal products; common and equity investment; the development and rental of non-current assets; the provision of guard and system security services; the design of software system; the manufacture, purchase and sale of magnetic powder; the provision of enterprise management advisory services; the design for environmental mechanical and electrical engineering; and waste management.

Provider
Yuanta
Yuanta

​Yuanta is a Taiwan-headquartered brokerage with a growing presence in Asia, especially across Greater China. Our team of 140+ provides cutting-edge analysis on key sectors, spread across offices in Taiwan, Hong Kong, Shanghai (A-Share), Seoul and Jakarta. With an ever-expanding coverage universe of 400+ companies, we provide in depth analysis with unique local color to investors. Consistently being voted the Best Investment Consulting Firm in Taiwan in the AsiaMoney broker poll is evidence of our strength. We target providing an extensive range of research, from small, to mid-sized, to large cap. We bring you the big, well-covered names, as well as going off the beaten track to research the less-familiar companies.

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