Global Materials | Industrials | Commodities

Rahul Jain

Equity Bottom-Up

Nippon Steel Corporation / Equity Bottom-Up

<ul>
<li>Nippon Steel targets over 100 Mt capacity by 2030, focusing on global growth as Japan’s domestic demand shrinks.</li>
<li>It plans to acquire U.S. Steel for $14.9B and expand in India via AMNS joint ventures.</li>
<li>FY24 profit rose 36%, but export reliance, ESG lag, and U.S. deal hurdles pose risks.</li>
</ul>


Nippon Steel targets over 100 Mt capacity by 2030, focusing on global growth as Japan’s domestic demand shrinks.
It plans to acquire U.S. Steel for $14.9B and expand in India via AMNS joint ventures.
FY24 profit rose 36%, but export reliance, ESG lag, and U.S. deal hurdles pose risks.


Nippon Steel (5401 JP): Navigating Decline at Home, Expanding Abroad

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

<ul><li>United States Steel Corporation (U.S. Steel) has reported its financial results for the fourth quarter and full year of 2023, showcasing another period of robust financial performance despite the challenging global economic environment.</li><li>The company ended the year with net earnings of $895 million, or $3.56 per diluted share, and adjusted net earnings for the fourth quarter were $167 million, or $0.67 per diluted share.</li><li>These results were bolstered by better performance across both the Mini Mill and Tubular segments, and favorable year-end inventory adjustments in the North American Flat-Rolled segment.</li></ul>

United States Steel Corporation (U.S. Steel) has reported its financial results for the fourth quarter and full year of 2023, showcasing another period of robust financial performance despite the challenging global economic environment.The company ended the year with net earnings of $895 million, or $3.56 per diluted share, and adjusted net earnings for the fourth quarter were $167 million, or $0.67 per diluted share.These results were bolstered by better performance across both the Mini Mill and Tubular segments, and favorable year-end inventory adjustments in the North American Flat-Rolled segment.

United States Steel Corporation: Its Merger with Nippon Steel & 4 Key Factors Impacting Its Performance In 2025 & Beyond! - Financial Forecasts

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>The 2024 U.S. presidential election could heavily impact M&amp;A, with contrasting policies from Harris and Trump potentially raising or easing regulatory barriers, especially in sectors like tech and energy.</li>
<li>Harris's focus on strict antitrust enforcement and potential corporate tax hikes contrasts with Trump’s pro-business, deregulation stance, which aims to stimulate M&amp;A by reducing regulatory challenges.</li>
<li>A Trump administration might boost investor confidence through tax cuts and reduced oversight, potentially increasing domestic M&amp;A, while Harris could promote competitive growth by supporting small and medium enterprises.</li>
</ul>


The 2024 U.S. presidential election could heavily impact M&amp;A, with contrasting policies from Harris and Trump potentially raising or easing regulatory barriers, especially in sectors like tech and energy.
Harris's focus on strict antitrust enforcement and potential corporate tax hikes contrasts with Trump’s pro-business, deregulation stance, which aims to stimulate M&amp;A by reducing regulatory challenges.
A Trump administration might boost investor confidence through tax cuts and reduced oversight, potentially increasing domestic M&amp;A, while Harris could promote competitive growth by supporting small and medium enterprises.


Potential Consequences of the U.S. Presidential Election on North America M&A

<ul>
<li>On September 26, Nippon Steel's president affirmed the company's commitment to completing the <a href="https://www.smartkarma.com/entities/united-states-steel-corp" target="_blank" data-smartkarma-citation="entities:202:1" rel="noopener">United States Steel (X US)</a> acquisition by year-end, despite the CFIUS review being extended until December.</li>
<li>U.S. Steel, with an expected value of $45.19/share offers 27% upside potential. This discount, driven by acquisition/fundamental value, supports a buy recommendation thus, I would be long U.S. Steel.</li>
<li>If the deal were to succeed, the likelihood of it closing before the end of 2024 is low, primarily due to the complexities surrounding the American presidential elections.</li>
</ul>


On September 26, Nippon Steel's president affirmed the company's commitment to completing the United States Steel (X US) acquisition by year-end, despite the CFIUS review being extended until December.
U.S. Steel, with an expected value of $45.19/share offers 27% upside potential. This discount, driven by acquisition/fundamental value, supports a buy recommendation thus, I would be long U.S. Steel.
If the deal were to succeed, the likelihood of it closing before the end of 2024 is low, primarily due to the complexities surrounding the American presidential elections.


Nippon Steel/US Steel: Appealing Expected Value

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Keisei Electric Railway Co / Event-Driven

<ul>
<li>The CSRC has announced five capital market cooperation measures for the Hong Kong Southbound Connect programs including  RMB dual counters and REITs. </li>
<li>
<a href="https://www.smartkarma.com/entities/jardine-cycle-carriage-ltd" target="_blank" data-smartkarma-citation="entities:347:1" rel="noopener">Jardine Cycle &amp; Carriage (JCNC SP)</a>'s current implied stub value and simple ratio are both highly elevated.</li>
<li>A simple <a href="https://www.smartkarma.com/entities/keisei-electric-railway-co" target="_blank" data-smartkarma-citation="entities:10876:1" rel="noopener">Keisei Electric Railway Co (9009 JP)</a>model says "this doesn't present me with enough upside to warrant it unless I am also really bullish <a href="https://www.smartkarma.com/entities/oriental-land-co-ltd" target="_blank" data-smartkarma-citation="entities:13517:1" rel="noopener">Oriental Land (4661 JP)</a>."</li>
</ul>


The CSRC has announced five capital market cooperation measures for the Hong Kong Southbound Connect programs including  RMB dual counters and REITs. 

Jardine Cycle &amp; Carriage (JCNC SP)'s current implied stub value and simple ratio are both highly elevated.
A simple Keisei Electric Railway Co (9009 JP)model says "this doesn't present me with enough upside to warrant it unless I am also really bullish Oriental Land (4661 JP)."


Last Week in Event SPACE: HK Southbound, Jardine Cycle, Keisei/Oriental Land, BHP/Anglo American

United States

United States Steel Corporation operates as an integrated steel producer. The Company manufactures flat-rolled and tubular products with production operations in North America and Europe. United States Steel serves the automotive, appliance, container, industrial machinery, construction, and oil and gas industries.

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United States Steel (X US)

Nippon Steel (5401 JP): Navigating Decline at Home, Expanding Abroad

Nippon Steel aims for global growth with plans to expand capacity, acquire U.S. Steel, and focus on India joint ventures, despite risks of export...

Rahul Jain

United States Steel Corporation: Its Merger with Nippon Steel & 4 Key Factors Impacting Its Performance In 2025 & Beyond! - Financial Forecasts

United States Steel Corporation (U.S. Steel) has reported its financial results for the fourth quarter and full year of 2023, showcasing another...

Baptista Research

Potential Consequences of the U.S. Presidential Election on North America M&A

The 2024 U.S. presidential election could heavily impact M&A, with contrasting policies from Harris and Trump potentially raising or easing...

Jesus Rodriguez Aguilar

Nippon Steel/US Steel: Appealing Expected Value

Nippon Steel remains committed to acquiring U.S. Steel despite CFIUS review extension, offering 27% upside potential. Deal may not close before...

Jesus Rodriguez Aguilar

Last Week in Event SPACE: HK Southbound, Jardine Cycle, Keisei/Oriental Land, BHP/Anglo American

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

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52-week Range

Market Cap (USDm)

P/E

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Nippon Steel (5401 JP): Navigating Decline at Home, Expanding Abroad

​Nippon Steel aims for global growth with plans to expand capacity, acquire U.S. Steel, and focus on India joint ventures, despite risks of export...

Rahul Jain

United States Steel Corporation: Its Merger with Nippon Steel & 4 Key Factors Impacting Its Performance In 2025 & Beyond! - Financial Forecasts

United States Steel Corporation (U.S. Steel) has reported its financial results for the fourth quarter and full year of 2023, showcasing another...

Baptista Research

Potential Consequences of the U.S. Presidential Election on North America M&A

The 2024 U.S. presidential election could heavily impact M&A, with contrasting policies from Harris and Trump potentially raising or easing...

Jesus Rodriguez Aguilar

Nippon Steel/US Steel: Appealing Expected Value

​Nippon Steel remains committed to acquiring U.S. Steel despite CFIUS review extension, offering 27% upside potential. Deal may not close before...

Jesus Rodriguez Aguilar

Last Week in Event SPACE: HK Southbound, Jardine Cycle, Keisei/Oriental Land, BHP/Anglo American

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Nippon Steel aims for global growth with plans to expand capacity, acquire U.S. Steel, and focus on India joint ventures, despite risks of export...

Nippon Steel remains committed to acquiring U.S. Steel despite CFIUS review extension, offering 27% upside potential. Deal may not close before...