德意志银行-亚洲钢铁产业-Asia Steel Industry Undervalued structural changes；reiterated Buy for steel sector-20170720-DeutscheBank.pdfVIP

Deutsche Bank AG Asia Steel Industry Undervalued structural changes; reiterated Buy for steel sector James Kan 甘清仁 james.kan@, +852-2203 6146 July 2017 Distributed on: 19/07/2017 12:30:00 GMT Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MCI(P) 083/04/2017 0bed7b6cf11c Structural reform raising sector profitability (I) Structural reform raising sector profitability I. We regard the steel sector as capable of sustainable long-term profitability improvements. II. We believe the steel spreads (proxy of profitability) may continue to climb on the back of potential industrial inventory restocking since late 2016. III. Continuous supply side reform implemented by Chinese government may cut c. 4-5% capacity every year and push the average utilization rate of China steel industry back above 80% in 2018. IV. As such, we see the profitability improvement of steel companies is sustainable Source: Deutsche Bank, Wind ,Bloomberg Finance LP Deutsch