Investors should concern about steel pipe and special steel

    According to Voice of the economy, “live trading” report, in December 7, the State Securities steel industry analyst Wang Zhaohua as a guest of “live trading” to invest opportunities in the steel industry analysis. Wang Zhaohua considers the next six months investors can focus on steel pipe and special steel shares. 
    Emcee: Well, from the iron and steel “12th five years plan” interpretation point of view, investors should choose what a idea of it in the steel stocks ? Or which sub-section will be more with the more investment value?
    Wang Zhaohua: So investors need to uphold a idea that if for the short to medium term from 3 to 6 months of the point of view, we recommend investors to focus on the steel tube stocks and special steel shares. Why? Because on the next 3-6 months the mood of the market may still be some small item. The second is some new material, then just the steel pipes and the special steel stocks have both of these two characteristics, If placed in 6-12 months or more than six months even longer perspective, we believe that we can invest in common steel stocks, because of its valuation level is at a historic low.
    Emcee: In addition, we also see the current steel stock margin of safety is in fact relatively high. Please introduce the the overall level of earnings to us.
    Wang Zhaohua: because steel shares is at a loss, if we look at price-earnings ratio, it’s not easy.
    Emcee: look at price to book ratio.
    Wang Zhaohua: If you look at PB, now the common PB of the whole steel area, steel stocks is 1.04 times, which level is very rare in the history of the level, also is the 0.9 times of lowest point in history. What’s more, it stand in 0.9 to 1 times for a short time. Basically iron and steel stocks now are at a very low level in history, as part of the steel stocks, like the Valin Iron, PB even down to about 0.7, this also belongs to historic lows.
    Emcee: We also see that there are indeed many steel stocks share price is lower than the net assets, the net is broken. So many listeners think that whether after broken it has a net long-term investment value, because it’s relatively safe. Are there some opportunities to understand it in the future?
    Wang Zhaohua: We agree with these views, the net like some broken stock, including shares of Valin Iron & Steel, Baosteel, we also have a medium to long thinking for one or two year. Like this or even three years, from our point, if you still have confidence in China’s economy, and will not say that the collapse of China’s economy, you should agree with this view. We think, as I said earlier, these stocks have a long-term investment value, but the short-term estimates have to continue discussion.
    Emcee: we answer a listeners question, he said the main tone of investment next year, that will the steel plate have periodical market or trading opportunities?
    Wang Zhaohua: I think this listener’s question is about the common carbon steel shares. We believe that the common carbon steel is the main trend of the steel plate. So we believe that carbon steel stock market need to wait until the second quarter or next year to look over. Let’s say at that time.    
    Emcee: The last little bit of time, please give us some tips for the overall risk of investment in the steel plate.  
    Wang Zhaohua: because steel plate is related to the macro-economic side, if the macro-economic continued have malaise, macro-economic policies continue not to be further relaxed, we believe that the steel plate has place for further decline, or there is further consolidation of space. 

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