SteelOrbis Shanghai
With the strong adjustments experienced by Chinese stock markets recently, the share prices of four Chinese steel companies have descended below their net asset values per share (NAVPS). The four companies in question are Handan Iron and Steel Co., Ltd, SGIS Songshan Co., Ltd (subsidiary of Shanguan Iron and Steel Group), Anyang Iron and Steel Co., Ltd, and Benxi Iron and Steel Co., Ltd. Meanwhile, the share prices of four other companies including Hunan Valin Steel Tube and Wire Co. and Hangzhou Iron and Steel Co., Ltd are approaching their respective NAVPS.
On August 4, the closing share price of Handan Iron and Steel Co., Ltd was at RMB 4.32, lower than its NAVPS of RMB 4.38. On August 8, the Shanghai Stock Exchange index decreased by more than 120 points, down 4.47 percent. On the same day, SGIS Songshan Co., Ltd and Anyang Iron and Steel Co., Ltd also followed the trend set by Handan Iron and Steel Co., Ltd.
On August 11, the Shanghai Stock Exchange index slipped 135.64 points, i.e., 5.21 percent. Benxi Iron and Steel Co., Ltd became the fourth steel company whose share price dropped below its NAVPS.
According to analysts, the above situation is due to the overall slackening of the capital market and investors' concerns regarding the periodical peaking of the steel industry. However, many analysts have commented that stock investors have overestimated the possible impact of the recent fluctuations on steel stocks.