Over 25-yrs in Global Materials & Soft Commodities

Charles Spencer

Equity Bottom-Up

Angang Steel Co Ltd (H) / Equity Bottom-Up

INVESTMENT VIEW: Despite having pushed out the timing on our call for a meaningful correction in steel prices, we remain Cautious on the outlook for Chinese steel earnings and Angang shares into 2019.  In addition, we see a number of headwinds, beyond pricing, challenging the sustainability in peak-of-cycle earnings.  Our <a href="https://www.smartkarma.com/entities/203" target="_blank" data-smartkarma-citation="entities:203:1">Angang Steel Co Ltd (H) (347 HK)</a> price target remains HK$6.50, but the timing of the correction is likely delayed into 4Q18. 
RECENT NEWS-FLOW MORE SUPPORTIVE…:  <a href="https://www.smartkarma.com/entities/203" target="_blank">Angang </a>shares…

INVESTMENT VIEW: Despite having pushed out the timing on our call for a meaningful correction in steel prices, we remain Cautious on the outlook for Chinese steel earnings and Angang shares into 2019.  In addition, we see a number of headwinds, beyond pricing, challenging the sustainability in peak-of-cycle earnings.  Our Angang Steel Co Ltd (H) (347 HK) price target remains HK$6.50, but the timing of the correction is likely delayed into 4Q18. 
RECENT NEWS-FLOW MORE SUPPORTIVE…:  Angang shares…

Policy Easing Pushes Out Our Correction Call, But Headwinds to Return into FY19

Equity Analyst

Gihan Bandara

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Event-Driven

The Reserve Bank of India published a list of companies that has a collective outstanding debt value of around INR2,000bn during 2017. This list includes 12 major companies that account for 20% of the current NPAs of the Indian banking system, out of these, 5 are steel manufacturers (Bhushan Steel, Bhushan Power, Monnet Ispat, Electrosteel and Essar Steel). The cumulative steel production capacity of these five companies are around 23 MTPA. Accordingly, these companies account for around 25% of…

The Reserve Bank of India published a list of companies that has a collective outstanding debt value of around INR2,000bn during 2017. This list includes 12 major companies that account for 20% of the current NPAs of the Indian banking system, out of these, 5 are steel manufacturers (Bhushan Steel, Bhushan Power, Monnet Ispat, Electrosteel and Essar Steel). The cumulative steel production capacity of these five companies are around 23 MTPA. Accordingly, these companies account for around 25% of…

TATA Steel Could Retake Capacity Crown as 20% of Indian Steel Capacity up for Grabs

INVESTMENT VIEW: We would sell <a href="https://www.smartkarma.com/entities/203" target="_blank" data-smartkarma-citation="entities:203:1">Angang Steel Co Ltd (H) (347 HK)</a> shares, price target HK$6.50, in expectation of a weaker steel price this summer.STEEL MARGINS AT PEAK: Share prices across the sector have rallied strongly since their 1Q16 lows, with <a href="https://www.smartkarma.com/entities/21125" target="_blank" data-smartkarma-citation="entities:21125:1">ArcelorMittal (MT NA)</a> and Angang Steel shares having roughly tripled during this period. A combination of industrial reform in China and buoyant economic growth across the globe have fuelled a powerful pricing recovery which has also roughly tripled…

INVESTMENT VIEW: We would sell Angang Steel Co Ltd (H) (347 HK) shares, price target HK$6.50, in expectation of a weaker steel price this summer.STEEL MARGINS AT PEAK: Share prices across the sector have rallied strongly since their 1Q16 lows, with ArcelorMittal (MT NA) and Angang Steel shares having roughly tripled during this period. A combination of industrial reform in China and buoyant economic growth across the globe have fuelled a powerful pricing recovery which has also roughly tripled…

Chinese Steel Traders Turn Bearish; Sell Angang PT HK$6.50

Equity Analyst, LightStream Research

Chacko Jacob

Thematic (Sector/Industry)

The wait for Essar Steel’s lenders only got longer as the Consortium of Creditors that replaced its board rejected bids from Numetal and <a href="https://www.smartkarma.com/entities/21125" target="_blank" data-smartkarma-citation="entities:21125:1">ArcelorMittal (MT NA)</a> after finding them ineligible under revised bankruptcy laws. Essar Steel owes over INR 450bn to its lenders comprising about 22 banks. We take a quick look at the Company and the potential bidders in round two.<h2>The Background</h2>Essar Steel is an integrated steel producer with an annual capacity of 10MT that was established by the Ruia family…

The wait for Essar Steel’s lenders only got longer as the Consortium of Creditors that replaced its board rejected bids from Numetal and ArcelorMittal (MT NA) after finding them ineligible under revised bankruptcy laws. Essar Steel owes over INR 450bn to its lenders comprising about 22 banks. We take a quick look at the Company and the potential bidders in round two.The BackgroundEssar Steel is an integrated steel producer with an annual capacity of 10MT that was established by the Ruia family…

Essar Steel: Liquidation Looms Large as Bidding Forced into Round Two

Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. We offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. 

Morningstar provides data on more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 16 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $180 billion in assets under advisement or management as of June 30, 2015. We have operations in 27 countries.

Download the Morningstar Fact Sheet : http://corporate.morningstar.com/US/documents/MarketingFactSheets/AboutMorningstarFactsheet.pdf

Nippon Steel Corporation / Equity Bottom-Up

We see little in <a href="https://www.smartkarma.com/entities/961" target="_blank" data-smartkarma-citation="entities:961:1">Nippon Steel &amp; Sumitomo Metal Corp (5401 JP)</a>'s, or NSSMC’s, 2020 Midterm Management Plan, which runs from fiscal 2019 (ending March) to fiscal 2021, that will change our view on the firm. We think NSSMC remains overvalued and we reduce our fair value estimate to JPY 2,090 (from JPY 2,130) mainly due to a higher-than-expected capital expenditures guidance, which lowers our free cash flow assumptions. Our no-moat and stable moat trend ratings remain.Among the key initiatives in…

We see little in Nippon Steel &amp; Sumitomo Metal Corp (5401 JP)'s, or NSSMC’s, 2020 Midterm Management Plan, which runs from fiscal 2019 (ending March) to fiscal 2021, that will change our view on the firm. We think NSSMC remains overvalued and we reduce our fair value estimate to JPY 2,090 (from JPY 2,130) mainly due to a higher-than-expected capital expenditures guidance, which lowers our free cash flow assumptions. Our no-moat and stable moat trend ratings remain.Among the key initiatives in…

NSSMC’s 2020 Midterm Plan Mainly Focuses on Steel; FVE Lowered to JPY 2,090; Shares Overvalued

Luxembourg

ArcelorMittal produces steel. The Company manufactures cold rolled, electrogalvanized and coated steels, slabs, bars, and wire rods. ArcelorMittal serves customers worldwide.

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ArcelorMittal (MT NA)

Policy Easing Pushes Out Our Correction Call, But Headwinds to Return into FY19

INVESTMENT VIEW:Despite having pushed out the timing on our call for a meaningful correction in steel prices, we remain Cautious on the outlook for...

Charles Spencer

TATA Steel Could Retake Capacity Crown as 20% of Indian Steel Capacity up for Grabs

The Reserve Bank of India published a list of companies that has a collective outstanding debt value of around INR2,000bn during 2017. This list...

Gihan Bandara

Chinese Steel Traders Turn Bearish; Sell Angang PT HK$6.50

INVESTMENT VIEW:We would sell Angang Steel Co Ltd (H) (347 HK) shares, price target HK$6.50, in expectation of a weaker steel price this...

Charles Spencer

Essar Steel: Liquidation Looms Large as Bidding Forced into Round Two

The wait for Essar Steel’s lenders only got longer as the Consortium of Creditors that replaced its board rejected bids from Numetal and...

Chacko Jacob

NSSMC’s 2020 Midterm Plan Mainly Focuses on Steel; FVE Lowered to JPY 2,090; Shares Overvalued

We see little in Nippon Steel & Sumitomo Metal Corp (5401 JP)'s, or NSSMC’s, 2020 Midterm Management Plan, which runs from fiscal 2019 (ending...

Morningstar, Inc.

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