Over 25-yrs in Global Materials & Soft Commodities

Charles Spencer

Commodities analyst with over 25-years of experience. Combining industry knowledge with predictive analytics to develop deep insights for market participants making investment decisions and capital allocations.

Angang Steel: PMI Recovery to Support Shares: Close Short

Alpha Factors

Equity Bottom-Up

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

<p><strong>INVESTMENT VIEW:</strong> We highlighted in our April upgrade note that Chinese steel fundamentals were at cycle trough and have the potential to quickly rebound.  However, fundamentals have remained weak and <a href="https://www.smartkarma.com/entities/angang-steel-co-ltd-h" target="_blank" data-smartkarma-citation="entities:203:1" rel="noopener">Angang Steel Co Ltd (H) (347 HK)</a> share price has fallen since our recommendation.  There are still positive catalysts which could lead to a recovery in industry conditions but our earlier optimism for a quick turn-around has faded.  Despite that, the shares look too cheap to sell at just 0.4x BV and we continue to own them but lower our 12-month price target to HK$3.25 to reflect the more mixed investment case we see at the moment.  </p>

INVESTMENT VIEW: We highlighted in our April upgrade note that Chinese steel fundamentals were at cycle trough and have the potential to quickly rebound.  However, fundamentals have remained weak and Angang Steel Co Ltd (H) (347 HK) share price has fallen since our recommendation.  There are still positive catalysts which could lead to a recovery in industry conditions but our earlier optimism for a quick turn-around has faded.  Despite that, the shares look too cheap to sell at just 0.4x BV and we continue to own them but lower our 12-month price target to HK$3.25 to reflect the more mixed investment case we see at the moment.  

Angang Steel Co Ltd (H)

Angang Steel: From Bad to Worse...