Angang Steel (SEHK:347) - Share price, News & Analysis

Q: What is the Fair Price of 347 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

347 (HK$2.62) is trading below our estimate of [[fair value]] (HK$10.02)

347 fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	1/6
Past Performance	4/6
Financial Health	6/6
Dividends	4/6

347 Stock Overview

Angang Steel Company Limited engages in the production, processing, and sale of steel products in the People’s Republic of China.

Rewards

Trading at 73.8% below our estimate of its fair value

Earnings are forecast to grow 2.61% per year

Earnings grew by 116.8% over the past year

Risk Analysis

Unstable dividend track record

Angang Steel Competitors

Maanshan Iron & Steel

SEHK:323

HK$25.3b

Chongqing Iron & Steel

SEHK:1053

HK$17.6b

Shougang Fushan Resources Group

SEHK:639

HK$13.8b

Tiangong International

SEHK:826

HK$8.1b

Price History & Performance

Summary of all time highs, changes and price drops for Angang Steel
Historical stock prices
Current Share Price	HK$2.62
52 Week High	HK$6.83
52 Week Low	HK$2.42
Beta	1.52
1 Month Change	-1.50%
3 Month Change	-20.37%
1 Year Change	-50.75%
3 Year Change	-6.43%
5 Year Change	-46.45%
Change since IPO	100.35%

Recent News & Updates

Jul 29

Angang Steel (HKG:347) Has A Pretty Healthy Balance Sheet

The external fund manager backed by Berkshire Hathaway's Charlie Munger, Li Lu, makes no bones about it when he says...

May 30

Angang Steel (HKG:347) Is Increasing Its Dividend To HK$0.26

Angang Steel Company Limited ( HKG:347 ) will increase its dividend on the 23rd of June to HK$0.26. This will take the...

May 28

Angang Steel Company Limited (HKG:347) Shares Could Be 49% Below Their Intrinsic Value Estimate

Does the May share price for Angang Steel Company Limited ( HKG:347 ) reflect what it's really worth? Today, we will...

Shareholder Returns

	347	HK Metals and Mining	HK Market
7D	1.6%	1.5%	1.5%
1Y	-50.8%	-30.1%	-20.8%

Return vs Industry: 347 underperformed the Hong Kong Metals and Mining industry which returned -29.8% over the past year.

Return vs Market: 347 underperformed the Hong Kong Market which returned -20.6% over the past year.

Price Volatility

Is 347's price volatile compared to industry and market?
347 volatility
347 Average Weekly Movement	4.3%
Metals and Mining Industry Average Movement	6.0%
Market Average Movement	6.5%
10% most volatile stocks in HK Market	12.8%
10% least volatile stocks in HK Market	3.2%

Stable Share Price: 347 is less volatile than 75% of Hong Kong stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: 347's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1997	30,412	Shishuai Xu	https://www.ansteel.com.cn

Angang Steel Company Limited engages in the production, processing, and sale of steel products in the People’s Republic of China. Its principal products include hot rolled sheets, medium and thick plates, cold rolled sheets, galvanized steel sheets, color coating plates, cold rolled silicon steel, heavy rails and sections, seamless steel pipes and wire rods, and other products. The company also engages in ferrous metal smelting and steel pressing and processing activities.

Angang Steel Fundamentals Summary

How do Angang Steel's earnings and revenue compare to its market cap?
347 fundamental statistics
Market Cap	HK$31.21b
Earnings (TTM)	HK$7.98b
Revenue (TTM)	HK$161.47b

3.1x

P/E Ratio

0.2x

P/S Ratio

Is 347 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
347 income statement (TTM)
Revenue	CN¥139.78b
Cost of Revenue	CN¥126.73b
Gross Profit	CN¥13.05b
Other Expenses	CN¥6.14b
Earnings	CN¥6.91b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Aug 26, 2022

Earnings per share (EPS)	0.74
Gross Margin	9.34%
Net Profit Margin	4.94%
Debt/Equity Ratio	9.9%

How did 347 perform over the long term?

See historical performance and comparison

Dividends

9.7%

Current Dividend Yield

30%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 347 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 347?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 347. This is calculated by dividing 347's market cap by their current preferred multiple.
What is 347's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CN¥27.02b

347 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.2x
Enterprise Value/EBITDA	2.1x
PEG Ratio	1.2x

Price to Earnings Ratio vs Peers

How does 347's PE Ratio compare to its peers?

347 PE Ratio vs Peers

The above table shows the PE ratio for 347 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	5.9x
323 Maanshan Iron & Steel	2.8x	5.6%	HK$25.3b
1053 Chongqing Iron & Steel	4.7x	n/a	HK$17.6b
639 Shougang Fushan Resources Group	5.5x	-10.6%	HK$13.8b
826 Tiangong International	10.5x	15.1%	HK$8.1b
347 Angang Steel	3.1x	2.6%	HK$31.2b

Price-To-Earnings vs Peers: 347 is good value based on its Price-To-Earnings Ratio (3.1x) compared to the peer average (5.9x).

Price to Earnings Ratio vs Industry

How does 347's PE Ratio compare vs other companies in the HK Metals and Mining Industry?

Price-To-Earnings vs Industry: 347 is good value based on its Price-To-Earnings Ratio (3.1x) compared to the Hong Kong Metals and Mining industry average (5.3x)

Price to Earnings Ratio vs Fair Ratio

What is 347's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

347 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	3.1x
Fair PE Ratio	6.2x

Price-To-Earnings vs Fair Ratio: 347 is good value based on its Price-To-Earnings Ratio (3.1x) compared to the estimated Fair Price-To-Earnings Ratio (6.2x).

Share Price vs Fair Value

What is the Fair Price of 347 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 347 (HK$2.62) is trading below our estimate of fair value (HK$10.02)

Significantly Below Fair Value: 347 is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.

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Future Growth

How is Angang Steel forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

2.6%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 347's forecast earnings growth (2.6% per year) is above the savings rate (1.6%).

Earnings vs Market: 347's earnings (2.6% per year) are forecast to grow slower than the Hong Kong market (16.7% per year).

High Growth Earnings: 347's earnings are forecast to grow, but not significantly.

Revenue vs Market: 347's revenue is expected to decline over the next 3 years (-3.8% per year).

High Growth Revenue: 347's revenue is forecast to decline over the next 3 years (-3.8% per year).

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 347's Return on Equity is forecast to be low in 3 years time (9%).

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Past Performance

How has Angang Steel performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-3.2%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 347 has high quality earnings.

Growing Profit Margin: 347's current net profit margins (4.9%) are higher than last year (2.8%).

Past Earnings Growth Analysis

Earnings Trend: 347's earnings have declined by 3.2% per year over the past 5 years.

Accelerating Growth: 347's earnings growth over the past year (116.8%) exceeds its 5-year average (-3.2% per year).

Earnings vs Industry: 347 earnings growth over the past year (116.8%) exceeded the Metals and Mining industry 44.6%.

Return on Equity

High ROE: 347's Return on Equity (11.3%) is considered low.

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Financial Health

How is Angang Steel's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: 347's short term assets (CN¥35.4B) exceed its short term liabilities (CN¥34.5B).

Long Term Liabilities: 347's short term assets (CN¥35.4B) exceed its long term liabilities (CN¥5.1B).

Debt to Equity History and Analysis

Debt Level: 347 has more cash than its total debt.

Reducing Debt: 347's debt to equity ratio has reduced from 54.4% to 9.9% over the past 5 years.

Debt Coverage: 347's debt is well covered by operating cash flow (211.7%).

Interest Coverage: 347's interest payments on its debt are well covered by EBIT (146.9x coverage).

Balance Sheet

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Dividend

What is Angang Steel current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

9.68%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 347's dividend (9.68%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.84%).

High Dividend: 347's dividend (9.68%) is in the top 25% of dividend payers in the Hong Kong market (8.33%)

Stability and Growth of Payments

Stable Dividend: 347 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: 347's dividend payments have increased, but the company has only paid a dividend for 8 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (30.1%), 347's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (25.1%), 347's dividend payments are well covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

0.8yrs

Average management tenure

CEO

Shishuai Xu (48 yo)

0.75yr

Tenure

CN¥90,000

Compensation

Mr. Shishuai Xu has been General Manager of Angang Steel Company Limited since November 19, 2021 and Executive Director since January 6, 2022. He served as Deputy General Manager and Vice President at Anga...

CEO Compensation Analysis

Compensation vs Market: Shishuai's total compensation ($USD13.26K) is below average for companies of similar size in the Hong Kong market ($USD502.62K).

Compensation vs Earnings: Shishuai's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: 347's management team is not considered experienced ( 0.8 years average tenure), which suggests a new team.

Board Members

Experienced Board: 347's board of directors are not considered experienced ( 1.6 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/17 00:00
End of Day Share Price	2022/08/17 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31