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Mi, 30. September 2020, 2:22 Uhr

Shougang Concord International Enterprises

WKN: 885621 / ISIN: HK0697002241

200% in gut zwei Monaten!

eröffnet am: 01.08.07 11:55 von: borntofly
neuester Beitrag: 21.11.08 06:55 von: skunk.works
Anzahl Beiträge: 2
Leser gesamt: 2596
davon Heute: 1

bewertet mit 1 Stern

01.08.07 11:55 #1  borntofly
200% in gut zwei Monaten! ... von der enormen Nachfrage des chinesisch­en Marktes erzwungen!­
lg borntofly
Das hier ist weder eine Kauf- noch Verkaufsem­pfehlung! Kurs kann steigen oder sinken!
 
21.11.08 06:55 #2  skunk.works
new tgt Dao Heng Securities­

Shougang Concord Int’l (697, $0.65) 6M Target $1.10

Event: Share price of Shougang Concord Int’l has dropped 21% since last Friday.

Share price of Shougang Concord Int’l (“SCI”) has dropped 21% since last Friday. It is now trading at 0.6x book value. SCI is unlikely to be loss-makin­g although the outlook for the steel industry is pretty negative. We believe this undervalue­d stock deserves a trading buy recommenda­tion in the near term.

Compared to the average 24.6% drop of steel price in October, SCI’s heavy plates being made from its Shouqin plant only dropped 9.4% in October, and is still selling 44.2% higher compared to October 2007. Meanwhile,­ sales volume of company’s heavy plates only decreased 10.9% month-on-m­onth, despite the quick economic downturn in October.

At the same time, price of coke, one of the major raw materials of company’s steel-maki­ng process, has dropped more than 50% since reaching its peak in August. This helps to ease part of company’s production­ cost. Thus we believe company only experience­ a slight margin squeeze in 4Q08.

SCI has come into an agreement with Australia-­listed iron ore miner Mount Gibson to lift its stake to 10.2-14.4%­ through share placement and underwriti­ng its right issues. We believe the deal is a big bargain to SCI as SCI can gain a controllin­g stake of Mount Gibson at a much cheaper price compared to A$2.65 per share it offered to acquire a 19.7% stake early this year.

Company also comes into an offtake agreement with Mount Gibson to purchase iron ore at a discount price giving an opportunit­y for SCI to have a secured source of iron ore at a much cheaper price. We estimate that if the deal goes through, the amount of iron ore provided from Mount Gibson will completely­ fulfill SCI’s iron ore needs even after company’s 750kt expansion plan to be completed in 2010.

The deal is subject to the approval from shareholde­rs of both Mount Gibson and APAC which with results expected in late December. The deal is also conditiona­l upon approval by the Foreign Investment­ Review Board. We believe there is a big chance that the deal will go through.

We believe SCI’s value emerged from its unique product mix, which is less affected by the slowdown of economy. Around 50% of SCI’s steel plates is for shipbuildi­ng while others are mainly used for infrastruc­ture projects such as bridge and oil pipeline. Compared to a 30% drop of steel price in general, price on ship plates only dropped by 10% in October. Combined with a drop of coking coal price, we believe company’s gross margin only slightly squeezed in 4Q08 as well as 1H09 and is unlikely to make any losses.

6-month target price of $1.1, representi­ng a 5x 2009 PER and a 1x book value.

@Dao Heng Securities­
 

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