Angang Steel 347

Angang Steel 347

Postby winston » Fri May 09, 2008 2:37 pm

BROKER CALL - Angang Steel H-shares target price 30.7 hkd - JP Morgan

HONG KONG (XFN-ASIA) - JP Morgan set a price target of 30.7 hkd for Angang Steel's Hong Kong-listed H-shares and maintained its "overweight" rating, citing rising steel prices.

Steel prices in China continue to rise and their momentum is expected to continue, the investment bank said.

"Production growth is likely to lag demand growth while steel prices should remain strong," it said.

Angang is likely to grow its volume sales by 30 pct next year to 21 mln tons and to expand its capacity to about 40-50 mln tons by 2010 through acquisitions, it said.

The company's product mix improvement and cost advantages will also boost share performance, it added.

Angang Steel closed the morning up 0.312 hkd or 1.57 pct at 20.2.
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Re: Angang Steel 347

Postby winston » Fri Jun 06, 2008 10:52 am

Not vested in Angang anymore. Worried about the high cost of iron ore and coking coal. Am also worried about any price control on Chinese Steel.

==============================

From UOB-Kay Hian:-

Market to decide prices for non-Sichuan steel sales

Steel stocks yesterday became the casualties of news reports that Baogang – the country’s biggest steel mill listed in Shanghai – will not raise product prices for 3Q08, suggesting price intervention by Beijing.

At one point, their share prices slid 5-7%, but the losses narrowed to 3-5% at the end of the
trading session.

The market is getting increasingly worried about further price controls on commodities, considering the price caps on refined oil, fertiliser and power prices. The day before, Shandong province told coal miners to guarantee additional coal supplies to power companies at a Rmb10 discount for the three months from July onwards.

Are we going to see a similar move for steel stocks, which has triggered selling pressure on Angang Iron (347.HK), Maanshan Iron (323.HK), and Chonqing Iron (1053.HK)?

As it turned out, the news reports were partially correct. The four steel mills we contacted – Angang, Baogang, Maanshan and Chongqing Iron – said the price controls only applied to steel products sold to the earthquake-ravaged Sichuan province.

In Baogang’s case, it is keeping the prices of colour-coated products sold to Sichuan at pre-earthquake levels. “For other products, our sales persons will talk with each end-user separately to decide the prices,” said Baogang. In other words, products facing a shortage can expect to see price increases.

Management of the other three steel companies said prices of products sold to other parts of the country would be decided by the market. In fact, we expect Angang to raise product prices for non-Sichuan sales within a week. As we mentioned last week, it is very hard for the central government to control steel prices.

The reasons we gave were as follows:
a) China’s top 10 largest steel enterprises (mostly state enterprises) control only about 38% of the total steel market, suggesting that a highly fragmented market will render any price controls ineffective.
b) Thus far, price increases for key steel products in recent months are mainly driven by cost factors. We have seen the price of coke - a key ingredient used to produce steel - rise 50% ytd whereas that of iron ore should increase by at least 65%. These two items account for as much
as 50-60% of the unit COGS for steel products.
c) Small steel plants within 200km of Beijing - especially in Hebei province, where the country's capital is located - are cutting or shutting down operations to comply with an emissions-reduction policy during the 2008 Beijing Olympics, although this is supposed to be implemented from 20
July to 20 September. Small plants generally are big producers of long products such as wire rods and rebars, so supply cuts in this category will be more significant. (China’s urbanisation and the reconstruction of Sichuan will require more of this category of products, so price increases
are expected to stay robust.)

There will continue to be nervousness in the market as investors are now sensitive to any rumours of price control. But unlike the coal sector which enjoys a relatively low resource tax on the coal they mine, steel mills buy their iron ores from abroad, and iron ore prices should climb by at least 65% from April. Steel mills enjoy no subsidies in whatever form, so it is unlikely they will e penalised with price controls.

We will buy Angang Steel on weakness.
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Re: Angang Steel 347

Postby winston » Fri Jul 11, 2008 1:51 pm

Angang Steel, China's second-biggest steelmaker by value, retreated 3.2 percent to 13.60 yuan, the biggest drop since July 1.

Angang said its 2008 profit will be cut by 126 million yuan ($18 million) because of changes in the rules for asset depreciation.
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Re: Angang Steel 347

Postby winston » Mon Aug 11, 2008 12:24 pm

Not vested.

Angang Steel 0347 fell 1.8 percent ahead of its earnings announcement, due later in the day.

BNP Paribas has forecast an 11 percent increase in half-year profit at China's third largest steelmaker,
but the brokerage is bearish on steel makers because of high iron ore costs.

Steel prices, which weakened seasonally in the third quarter, are expected to stay low in the last three months of the year, while coking coal and electricity costs could rise further.
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Re: Angang Steel 347

Postby winston » Tue Aug 12, 2008 7:38 am

Not vested.

Angang earnings leap 24pc on higher prices
KathyWang

Angang Steel (0347), China's second-biggest steelmaker, said first-half profit rose 24 percent after it increased product prices to benefit from higher demand.

Net income rose to 5.98 billion yuan (HK$6.80 billion), or 0.827 yuan a share, from 4.80 billion yuan, or 0.81 yuan per share, a year earlier, according to Chinese accounting standards.

The company announced its results in a statement filed with the Shenzhen stock exchange yesterday. First-half revenue increased 22.7 percent to 40.2 billion yuan from 32.74 billion yuan a year earlier.

The Anshan, Liaoning-based steelmaker improved net profit margin to 14.88 percent in the first half, up from 14.66 percent last year. Its first-half profit would be 5.99 billion yuan under international accounting standards.

Angang's H shares yesterday dropped 1.74 percent to HK$11.26. The stock has fallen 20 percent in the past month and 47 percent in the last year.

The Financial Times reported that Arcelor Mittal offered to take a 25 percent stake in Angang in May. Angang vetoed the plan but indicated that it would support the Luxembourg- based company taking a smaller stake in Angang Steel.
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Re: Angang Steel 347

Postby winston » Wed Aug 13, 2008 8:07 pm

Not vested.

Angang expects slower growth in China steel demand

HONG KONG, Aug 13 (Reuters) - China's Angang Steel (0347.HK: Quote, Profile, Research, Stock Buzz), one of the country's top three steel producers, said growth in Chinese demand will slow in the second half and production costs are expected to rise faster than product prices.

China's steel consumption rose about 16.3 percent in the first six months of 2008 but is expected to ease to 13 percent growth in the second half, an Angang director, Fu Jihui, told reporters at a news conference on Wednesday.

Angang (000898.SZ: Quote, Profile, Research, Stock Buzz), the largest listed steel producer in Hong Kong, said net profit rose to 6 billion yuan ($874.5 million) in the first half, from 4.8 billion yuan a year earlier, on higher steel prices and lower tax payments.

But its shares extended losses after the executive's comments and hit a 17-month low of HK$10.16 before recovering slightly to close at HK$10.3, down 3 percent.

The stock has lost more than half of its market value this year, underperforming a 31 percent loss on the index for major Chinese companies listed in Hong Kong .HSCE, on concerns about weakening steel prices and rising production costs.

High production costs in the second half of this year could put pressure on its gross profit margin, which was 27.8 percent in the first half against an average of 26.5 percent in 2007.

"The new iron ore contracts started from April, which will heavily inflate our costs," Vice Chairman Tang Fuping said.

The 85 percent iron-ore price increase in 2008 contracts will be fully factored in second-half 2008
and first-half 2009 results, BNP Paribas said in a recent research note.

The price of coking coal is also rising and was at 1,800 yuan per tonne in August, nearly double the average of 990 yuan a tonne in the first half of the year, Tang said.

Large steelmakers in China, the world's top steel producer, have aggressively expanded in recent years to help meet booming demand from the infrastructure, shipbuilding and auto sectors.

Average steel prices in the third quarter were around 5,800-5,900 yuan per tonne against an average price of 5,200 yuan in the first half.

"We expect that steel prices peaked in the second quarter of 2008 and may weaken in the second half," BNP said.

"With high steel prices, steelmakers are much more sensitive to steel-price downside than before," it added.
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Re: Angang Steel 347

Postby winston » Fri Oct 24, 2008 9:51 am

Not vested.

China's Angang Steel Q3 net profit up 29 pct on higher selling prices

BEIJING (XFN-ASIA) - Angang Steel Co Ltd (SZA 000898; HK 0347) said net profit in the third quarter rose 28.93 pct year-on-year to 2.273 bln yuan due to higher selling prices and cost controls, which helped offset rising raw material prices.

During the quarter, the steelmaker said operating revenue rose 40.44 pct year-on-year to 22.847 bln yuan, while operating costs were up 45.32 pct year-on-year at 20.166 bln yuan.

The company did not provide details about production and costs in the statement.

Earnings per share stood at 0.314 yuan in the quarter, up from 0.297 yuan a year earlier.

In the first nine months, the company booked operating revenue of 63.105 bln yuan, up 28.78 pct year-on-year, while net profit rose 25.67 pct to 8.253 bln yuan.

Earnings per share in the nine months came in at 1.141 yuan, against 1.107 yuan a year earlier.

The steelmaker did not provide a forecast for the rest of the year.

The official China Securities Journal reported earlier that China's domestic steel prices plummeted an average of 12 pct between Oct 6 and 10, the biggest weekly decline since 2000.

Major steel companies including Hebei Iron and Steel Group, Baosteel, Shougang Group and Anyang Iron and Steel Group said they will slash production by 20 pct to stabilize prices.

Credit Suisse said in a note earlier this week that it is revising downward its earnings projection for Angang Steel for the full year by 4 pct and a further 35 pct for 2009 to reflect a poor demand outlook in the last quarter and the first quarter of next year.

A-shares of Angang Steel closed down 0.16 pct at 6.27 yuan yesterday.
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Re: Angang Steel 347

Postby winston » Thu Oct 30, 2008 8:27 am

Not vested.

Angang Steel (0347) jumped 13.9 percent to HK$3.53 after its parent company pledged to buy up to 5 percent of Angang's shares over the next 12 months.
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Re: Angang Steel 347

Postby winston » Wed Jan 21, 2009 10:31 am

China's Angang Steel Co Ltd (0347.HK) said on Tuesday it expects its 2008 net profit to fall 55 percent to about 3.42 billion yuan ($500 million) due to high raw material costs and slumping steel prices.

The sharply lower profit was also due to high fixed input but low output in its newly-built production zone and a provision of 1.8 billion yuan for the devaluing of steel product stockpiles, Angang said.
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Re: Angang Steel 347

Postby winston » Wed Jan 21, 2009 11:59 am

DJ MARKET TALK: Angang Off 8.3%, But Daiwa Tips Demand Recovery

1032 [Dow Jones] Angang Steel (0347.HK) tumbles 8.3% to HK$7.26, but off HK$6.94 low, which may not be revisited. Stock hurt by company warning FY08 net profit to fall 55% to CNY3.42 billion. Still, Daiwa says figure in line with its CNY3.39 billion forecast (though 60% below Bloomberg consensus).

House estimates Angang's 4Q08 loss at CNY4.8 billion, may imply other steel companies also had poor performances, though "we think the market may have already factored this in." Adds, Angang's earlier-than-expected profit warning should mitigate overhang with regard to FY08 earnings, "may set a solid stage for a rebound in the share price" when demand gradually recovers in FY09. Volume higher than recent average at HK$136.3 million.
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