The independent financial analyst theScreener just lowered the general evaluation of ANGANG STEEL CO (HK), active in the Steel industry. As regards its fundamental valuation, the title now shows 0 out of 4 stars while market behaviour can be considered moderately risky. theScreener believes that the title remains under pressure due to the loss of a star(s) and downgrades its general evaluation to Slightly Negative. As of the analysis date March 18, 2022, the closing price was HKD 3.45 and its ta...
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
Steel product prices rebounded strongly in July with domestic production slowing down. During the low demand season, we expect inventory build-up to continue. We see the industry’s profitability recovering as the steel price increase outpaces the raw material costs hike. We expect the positive 1H21 results to trigger a valuation recovery across the sector in the near term. Maintain MARKET WEIGHT. Top pick: Baosteel.
The stronger-than-expected steel market performance ytd has fuelled a strong earnings recovery across steel mills. We are positive on steel companies’ earnings performances in the traditional demand peak season (August to November), with raw material costs set to ease and supply to remain tight. Angang’s 1H21 profit alert surprised the market on the upside. We expect the positive surprise to trigger a valuation recovery across the sector in the near term. Maintain OVERWEIGHT. Top picks: Angang, ...
Steel spreads have enlarged to a record high qtd in 2Q21, driven by a spike in steel prices and downtrend in raw materials (iron ore and coke) prices. Demand has been strong, as evidenced by the fast decline in traders’ inventory, and supply remains tight with Tangshan having undertaken strict production curbs since March. We prefer flat products over long products in 2021. China’s carbon neutrality target is expected to benefit leading steel players in the long run. Upgrade to OVERWEIGHT. Top p...
EPS forecasts were cut following the 2020 earnings season, which was a mixed bag at best. A common theme we see is the increased demand for automation, premiumisation and digitisation of sales and distribution channels to sustain margins in the face of rising input cost. We recommend buying into these themes, upstream sectors and exposure to the re-opening of the US economy from the COVID-19 lockdown.
The prices of domestic steel products have been trending down since end-Dec 20. However, optimism over the recovery of demand after Chinese New Year is creating momentum for an upward revision of prices. Steel products’ inventory expanded 33% over the one-week CNY holiday, anticipating a return of demand. The hike in the prices of raw materials has weighed on the profitability of mills ytd, even as the recovery is expected. Maintain MARKET WEIGHT on the China steel sector. Top pick: Baosteel.
Global iron ore price spiked to a record high of US$155/tonne on 11 Dec 20, driven by optimism on China steel mills’ demand outlook and potential supply disruption. On the other hand, CRC spread has been improving in 4Q20, on the back of strong downstream demand recovery. Looking ahead, we prefer flat products (CRC/HRC) over long products (rebar) as we foresee better demand recovery outlook from the automobile, home appliances and machinery sectors. Maintain MARKET WEIGHT.
Market concerns over potential supply disruption from Brazil, along with a three-year low port inventory, boosted iron ore prices in the past few weeks. We believe China’s steel industry has yet to see meaningful recovery with total steel inventory remaining at a 7-year high despite strong de-stocking. We continue to prefer long products amid government stimulus to support infrastructure FAI. Maintain UNDERWEIGHT.
Rebar prices retreated entering the off season, while prices of flat products improved slightly in Dec 19. Meanwhile, inventory is piling up with downstream re-stocking kicking off. Looking ahead, we maintain cautious in 1H20 on continued downstream demand slowdown amid an oversupply. But current valuations of steel names are undemanding. We prefer long products. Maintain BUY on COG but downgrade Angang to SELL. Maintain UNDERWEIGHT.
KEY HIGHLIGHTS Results Angang Steel (347 HK/HOLD/HK$2.68/Target: HK$2.53) 3Q19: Net profit slumped 88% yoy on margin squeeze; headwinds persist. Bank of Ningbo (002142 CH/HOLD/Rmb26.82/Target: Rmb24.80) 3Q19: Results beat market expectations, capital raised for future growth. China Construction Bank (939 HK/BUY/HK$6.23/Target: HK$7.23) 3Q19: Results in line. Stable growth underpinned by solid asset quality. China Eastern Airlines (670 HK/HOLD/HK$3.96/Target: HK$4.00) 3Q19: 9.8% yoy rise in ...
Angang Steel announced 9M19 net profit of Rmb1.7b, down 75% yoy. 3Q19 net profit slumped 87.7% to Rmb297m (-70.5%qoq). The weak results were mainly dragged down by margin squeeze on lower steel ASP and higher iron ore/coking coal cost. We expect Angang to continue facing headwinds in 4Q19 given the overall oversupplied market situation. Cut target price to HK$2.53 on lower earnings forecasts. Maintain HOLD. Entry price: HK$2.30.
The historical high in domestic crude steel production in May and the fall in the steel spreads of steel mills have been major drags on steel names’ performances since Apr 19. We see no clear signs of a sector recovery at the current stage while the execution and impact of Tangshan’s newly-introduced steel production curbs have to be monitored and assessed. Maintain UNDERWEIGHT on China’s steel sector.
Angang Steel warned of a net profit slump of 78% yoy in 1Q19, mainly due to dropping steel prices and surging raw material costs. The profit alert came in worse than peers’ and our conservative forecasts. We expect Chinese steel mills to face headwinds in 2019 with the supply-side effects fading away. We expect to see margin deterioration from last year’s high base. Downgrade to SELL and lower target price to HK$5.04 on weaker earnings outlook.
KEY HIGHLIGHTS CHINA Economics Money Supply Monetary easing starts to yield results, but sustainability vital. Trade Steep Fall In Imports Still A Concern. Sector Education 2018 results wrap-up. Property 2018 results wrap-up: Positive on the sector. Solar Market mechanism to propel development. Update Angang Steel (347 HK/SELL/HK$5.90/Target: HK$5.04) Worse-than-expected 1Q19 on margin deterioration; downgrade to SELL. HONG KONG Sector Property 2018 results wrap-up. TRADERSâ€...
KEY HIGHLIGHTS CHINA Initiate Coverage WuXi Biologics (Cayman) (2269 HK/BUY/HK$73.95/Target: HK$103.50) Leveraging the biologics boom. Results Chaowei Power (951 HK/SELL/HK$3.09/Target: HK$1.65) 2018: Earnings beat our estimate but misses consensus. China National Building Material (3323 HK/BUY/HK$5.98/Target: HK$8.44) 2018: In line with our expectations; strong momentum to sustain into 2019 China Shenhua Energy (1088 HK/BUY/HK$18.30/Target: HK$22.42) 2018: Results in line with expecta...
Angang Steel announced full-year 2018 earnings that were slightly above preliminary results, with net profit increased by 19.8% year over year to CNY 7.95 billion from CNY 6.64 billion in 2017, based on restated numbers after adoption of new accounting policy and the acquisition of Angang Chaoyang in September 2018. Dividend per share of CNY 0.22 was announced, representing a payout ratio of 20% and is a slight decline from CNY 0.232 declared in 2017. The board also proposed a bonus issue of thr...
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