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Anshan Steel Co. Ltd. - Reformed With Another Giant Benxi Steel & Iron Group Corporation

Fri, 15 Aug 2008 08:26:39 EST

Anshan Steel Co. Ltd. - Reformed With Another Giant Benxi Steel & Iron Group Corporation - by liz

Anshan Steel Co. Ltd.

Public (SZ: 000898)

Company Facts

Anshan Steel Co. Ltd. is mainly involved in the smelting of the black metal and steel press forging. The company was known as Anshan Steel Group Corporation, which was the Chinese first steel & iron manufacturing enterprise that was set up in December 1948 (People’s Republic of China was established in year 1949). Approved by National System Reform Committee, the company was established on May 1997 and got listed in Shenzhen Stock Exchange in the same year.

Thanks for the steel price appreciation and product structure’s perfection, in the first half of year 2008, the company has achieved business income and net profit margin of RMB 40.17 billion Yuan and RMB 5.98 billion Yuan separately, which made 22.7% and 23.6% increase corresponding the same period of previous year.

The company targets high-end special steel manufacture such as container board, pipe board, ship board, vehicle board, home applicant board, petrol pipe board and weathering steel, about 92% of its products are special steels which has are able secure the profit margins on a relatively high level. The company has become the largest supplier for ship board and pipe steel segments in China. Moreover, the company’s research & development has leading advantages internationally. Thus, the products of the company have been widely used in more than 20 large-scaled important national pipe engineering projects.

Recently, the company has been exclusively selected as the supplier of 600,000 tons of bullet train’s steel-track for Zhengxi Railway construction project, which is the monument in Chinese railway history as the speed of the bullet train is going to be 350 km/hr. The project has brought stable business for the company at the moment for sure, more importantly, it allows the company to step its footprints into 100-meter high-speed steel track production and tightly grasp the opportunity of the national-wide bullet train network construction and enjoy the expectant long term benefits.

Financial Review:

Related Companies:

-- Collaboration:

Ansc-Tks Galvanizing Co. Ltd.

Ansc – Dachuan Heavy Industry Dalian Steel Processing & Distribution Co. Ltd.

Changchun FAM-Anjing Steel Processing & Distribution Co. Ltd.

Ansc-Tks Steel Distribution (Changchun) Co. Ltd.

Ansc Shenyang Steel Processing & Distribution Co. Ltd.

Tks-Ansc (Changchun) Laser tailor welded blanks Co. Ltd.

Ansc Industry Group Packing Steel Strip Co. Ltd.

-- Holding Company

Anshan Steel & Iron Group Corporation. Percentage of rights and interests: 67.28%

-- Subsidiaries:

Ansc Steel Distribution (Wuhan) Co. Ltd.

-- Invested by same holding company:

Anshan Steel & Iron Group Corporation International Economical & Trading Co. Ltd.

Anshan Steel & Iron Group Corporation Institute of Designing

Anshan Steel & Iron Group Corporation Machinery Loading Co. Ltd.

Anshan Steel & Iron Group Corporation Real Estate Development Group Co. Ltd.

Anshan Steel & Iron Electronics Liability Company

Anshan Steel & Iron Group Corporation Fire-resistant Material Company

Anshan Steel & Iron Vehicle Transportation Limited Liability Company

Anshan Steel & Iron Group Corporation Railway Transportation Equipment Manufacture Company

Anshan Steel & Iron Group Corporation Hospitality Service Company

Anshan Steel & Iron Group Corporation Automation Company

Dalian Huayelian Automation Company

Anshan Steel & Iron Group Corporation Financial Co. Ltd.

Anshan Steel & Iron Group Corporation Steel Rope Limited Liability Company

Anshan Steel & Iron Group Corporation Real Estate Company

Anshan Steel & Iron Group Corporation Mining Company

Anshan Steel & Iron Group Corporation Railway Construction Company

Anshan Steel & Iron Industry Group Co. Ltd.

Anshan Steel & Iron Construction Group Co. Ltd.

Anshan Steel & Iron Heavy Machinery Limited Liability Company

Stock Health:

As on 13 August, 2008

Open: 9.90 High: 10.35 Low: 9.50 Close: 10.23 Vol.: 11,298,650

Key Stats & Ratios

Unite: RMB 10,000 Yuan

Item	30 June, 2008	2007	2006	2005
Main business income	4016800.00	6549900.00	5433000.00	2648811.50｜
Profit margin	752500.00	1037300.00	938100.00	298200.00
Net Profit margin	598000.00	752500.00	700300.00	207948.50
Profit Ratio %	10.66	13.87	23.25	18.35

Daily Stats (last one month):

Date	Open	High	Low	Close	Vol.
2008-08-14	10.18	10.33	10.00	10.13	8,345,540
2008-08-13	10.13	10.42	9.88	10.30	14,645,483
2008-08-12	9.90	10.37	9.81	10.29	23,080,617
2008-08-11	10.04	10.20	9.62	9.80	17,140,389
2008-08-08	10.70	10.74	10.01	10.06	18,099,088
2008-08-07	10.76	11.00	10.52	10.70	15,394,550
2008-08-06	10.96	11.11	10.57	10.76	16,651,366
2008-08-05	11.63	11.88	10.70	10.85	38,075,560
2008-08-04	12.33	12.33	11.70	11.81	17,327,890
2008-08-01	12.30	12.58	12.02	12.46	14,913,417
2008-07-31	13.09	13.09	12.48	12.50	11,268,192
2008-07-30	13.17	13.22	12.70	12.97	21,259,114
2008-07-29	13.16	13.16	12.60	12.86	22,046,673
2008-07-28	13.44	13.66	13.30	13.39	10,830,000
2008-07-25	13.50	13.59	13.19	13.29	17,970,752
2008-07-24	13.40	13.84	13.31	13.70	22,428,371
2008-07-23	13.46	13.63	13.20	13.24	18,576,522
2008-07-22	13.29	13.45	13.15	13.29	10,682,620
2008-07-21	12.73	13.55	12.59	13.35	18,312,411
2008-07-18	12.78	12.98	12.34	12.78	15,670,515
2008-07-17	12.91	12.99	12.38	12.42	15,912,668
2008-07-16	13.10	13.14	12.34	12.67	22,941,528
2008-07-15	14.06	14.19	13.19	13.32	24,027,146
2008-07-14	13.56	14.05	13.56	14.03	14,152,962
2008-07-11	13.95	14.05	13.41	13.74	22,693,384

Performance Analysis

The location of the company has played an significant role in the performance of the company. As the company is located in Anshan, Liaoning Province. The very nature of the geographic location has decided that only road transportation is available for transporting its imported raw materials from the close-by harbors and delivering steel products to its customers in country-wide and world-wide, which has become the bottleneck for the fast growth of the company. Therefore, the company has invested heavily in the Bayuquan Project, which is the largest in scale steel manufacture site in China that is connected with Bayuquan Harbor (Yingkou City, Liaoning Province), railways and national express ways.

The project is expected to be finished and start its operation within August 2008. Thereafter, the productivity of the company will increase by 31% and reach 21 million tons per year as well as able to transport its products to more than 100 ports and over 40 countries as well as to countrywide locations via railway or road transportation. Investors are suggested to pay attention to the progress of the project, as it is assumed that the project will start bringing profits in year 2009.

In my opinion, the recent slump of the stock price reflects the market worries towards sluggish demand in down-stream industries such as the realty and automotive industries. It is to some extent will affect the performance of steel & iron industry; however, the net profit margin of the company will not be affected as much as the market’s assumed while the price increase of the raw material costs are relatively less than the steel products’ price growth.

Importantly, the parent company of Anshan Steel Co. Ltd., Anshan Steel & Iron Group Corporation has reformed with another Chinese steel & iron giant – Benxi Steel & Iron Group Corporation. The strategic movement has not only effectively reduced price competition between two giants, but will reduce the costs in raw material consumption. As 80% of the steel mines are supplied by the parent company, Anshan Steel Co. Ltd. will gain more competitive advantages through the low costs of supplies.

Personally, I would like to suggest this stock to investors, especially, I am positive about middle term investment returns. For long term investment, there are some factors of concern, such as increase in fuel price that has put immense pressure on the company’s manufacturing costs, as well as the government’s policies that tightening up the exporting of steel & iron. To conclude, I believe that investors are likely to gain fruitful if they pay attention to the above mentioned factors and adjust their investment decisions accordingly.

Beijing Gehua CATV Network Co. Ltd. - Exclusive Live Cable TV Operator For The 2008 Olympic Games

Thu, 14 Aug 2008 09:34:29 EST

Beijing Gehua CATV Network Co. Ltd. - Exclusive Live Cable TV Operator For The 2008 Olympic Games - by liz

Beijing Gehua CATV Network Co. Ltd.

Public (SHA: 600037)

Company Facts:

Beijing Gehua CATV Network Co, Ltd. was initiated by Beijing Gehua Culture Development Group, Beijing Youth Newspaper Corporation, Beijing Cable TV Shopping Limited Liability Company, Beijing Broadcasting Development Corporation and Beijing Publishing House in year 1999. The company’s main business focus include construction & development of broadcasting and TV network, receiving and transferring broadcast & TV programme and broadcasting &TV network information services.

The company was exclusively approved by the government of Beijing is in charge of the construction, management and operation of cable TV network for the capital city of China. The company has 3.44 million analog TV customers and 1.9 million digital TV customers. Moreover, the company has moved forward its footprints into digital TV fields by building up strategic alliance with ‘Hair’ in manufacturing digital TV’s top-box business; shareholding digital TV technological companies such as Zhuozhuang Network Co. Ltd.

Financial Review:

Related Companies:

-- Shareholding Company:

Beijing Beiguang Media Digital TV Co. Ltd.

Beijing Shuimu Sunny Media Technology Co. Ltd.

Beijing Zhongguang Net-Media Information Consultant Co. Ltd.

Beijing Beiguang Media & Film Co. Ltd.

Beijing Digital Visual Technology Co. Ltd.

Shenzhen Zhuozhuang Network Technology Co. Ltd.

Beijing Beiguang Media Mobile TV Co. Ltd.

Beijing Jingshi Media Limited Liability Company

-- Holding Company:

Beijing Beiguang Media Investment Development Centre

-- Subsidiaries:

Beijing Shikuan Xinchuang Cable Information Engineering Limited Liability Company

Beijing Gehua Cable Digital Media Co. Ltd.

Zhuozhou Gehua Cable TV Network Co. Ltd.

-- Actual Controller:

Beijing Beiguang Media Group Co. Ltd.

-- Invested by same holding company:

Beijing Guangmei Real Estate Development Co. Ltd.

-- Ultimate Controller:

Government of Beijing

Stock Health:

As on 13 August, 2008

Open: 9.90 High: 10.35 Low: 9.50 Close: 10.23 Vol.: 11,298,650

Key Stats & Ratios

Unite: RMB 10,000 Yuan

Item	1st quarter of 2008	2007	2006	2005
Main business income	25061.82	118491.57	104584.85	89478.14
Profit margin	5709.18	36886.25	34741.74	32190.56
Net Profit margin	5709.30	36682.19	43271.61	27047.10
Profit Ratio %	1.42	9.24	11.80	10.80

Daily Stats (last one month):

Date	Open	High	Low	Close	Vol.
2008-08-13	9.90	10.35	9.50	10.23	11,298,650
2008-08-12	9.90	10.65	9.87	10.01	17,532,870
2008-08-11	11.80	11.80	10.97	10.97	11,011,050
2008-08-08	13.57	14.15	12.16	12.19	20,324,800
2008-08-07	12.60	13.60	12.52	13.51	9,166,210
2008-08-06	12.85	12.87	12.15	12.53	6,103,580
2008-08-05	13.30	13.35	12.47	12.51	6,796,070
2008-08-04	13.47	13.70	13.19	13.24	8,199,110
2008-08-01	12.76	13.59	12.51	13.45	10,392,180
2008-07-31	13.71	13.85	12.81	12.84	11,346,030
2008-07-30	14.02	14.18	13.49	13.66	7,079,080
2008-07-29	14.48	14.48	13.73	13.79	11,830,260
2008-07-28	14.66	15.15	14.41	14.56	11,103,830
2008-07-25	14.38	14.80	14.22	14.61	11,978,130
2008-07-24	14.04	14.68	13.95	14.57	16,361,910
2008-07-23	14.13	14.26	13.88	13.94	7,983,350
2008-07-22	14.00	14.47	13.81	13.99	10,768,480
2008-07-21	13.21	14.14	13.01	13.99	13,864,120
2008-07-18	13.18	13.50	12.44	13.28	16,491,460
2008-07-17	14.15	14.41	13.01	13.06	16,694,440
2008-07-16	14.70	15.19	13.80	14.01	14,993,770
2008-07-15	15.35	15.80	14.50	15.21	25,714,310
2008-07-14	14.05	15.67	14.01	15.35	26,040,560
2008-07-11	14.66	15.08	14.00	14.37	18,682,590
2008-07-10	15.52	15.98	14.90	14.94	22,053,430

Performance Analysis:

The digital TV business is emerging industry in China (mainland) which has relatively less competition; as well as it has great potential in the future along with considerable profit margin. The company aims to build up a digital industrial chain by tracing up-stream and down-stream in related businesses, such as manufacture of digital TV top-box and providing maintenance services for the digital TV network as well as product sales and development.

The company is referred as to the exclusive live cable TV operator for the 2008 Olympic Games. In my opinion, in short term, the profit return is barely seen comparing with the huge amount investment in order to fulfilled the Olympic mission, however, in long term company could see good returns if they accomplish the task successfully, it will improve the world-wide brand reorganization, which will come hand in hand with international investments and opportunities of co-operation, as well as more support from the government policies. Therefore, I would like to suggest investors to pay attention to this stock in middle and long terms.

Personally, I believe that, currently, the digital TV business in China is an industry that has high profit returns but also accompanied by high risks, like any other business. As the market is yet to mature, competition is relatively less fierce, especially, it is monopoly business which is initiated and financially supported in network construction by the government with objectives to improve the public living standard, the profit margin of the industry is considerably high.

However, the fee policy of digital market is set up by the government and there are immense pressure upon raising the service charge by the company; that means, although RMB 18 Yuan per month’s current charge is much less than it is in Shenzhen that is RMB 28 Yuan per month, or it is in Guangzhou RMB 25 Yuan per month, without permission from the government, the company is not able to increase the service charge.

I would like to throw some lights on the stock performance as well. As we can see from the above historical stock prices, the stock price slumped about 30% in the past one month. It is partially impacted by the overall stock market depression; more importantly, it shows the market’s worries about the uncertainty of post-Olympic performance of so-called ‘Olympic plate’ stocks. The company has invested heavily before the Olympic Games in order to guarantee its first-class services for the game. While the future benefits yet shown and service charge remains unchanged, the market investors start worrying about the company’s cash flow and capability of sustainable growth.

Nevertheless, I would like to suggest this stock to investors as the company has monopoly advantages in the digital TV industry in Beijing and the business structure of the company is also getting more and more sophisticated thus more risk resistant. Moreover, the current stock price is almost touching the bottom, thus it is the time for interested investors to buy-in. The only thing we need to pay attention is whether the company’s performance would continuously boom after the Olympic Games.

For the short term investors, I would like to suggest wait and watch, as post-Olympic performance of the company is yet uncertain; it is risky to rush in at the moment. For existing shareholders, I believe that there will be a chance in near future, once the government allows the company to increase the service charge, the overall business performance of the company will be largely improved, thus, having a positive impact on the stock price.