SMM Credit Services
SMM CREDIT SCORE OF STEEL INDUSTRY
No.1
2017Q1
Introduction
1. To help issuers and investors monitor the production operation and financial policies of steel mills thus evaluating the target's credit rating, SMM Credit Score (SCS) is published for our clients to assess the capacity of sustainable development of target steel mills. A hundred percentage point system is used for SCS with 60 percent as the passing grade and the report is to be updated quarterly; 2. SCS contains five broad factors which are identity, profitability, solvency, operating capa- bilities and growth capabilities. All factors are rated by SMM for each company, and a weighted sum of these factors is used to get the final score; 3. The information used in the construction of SCS include SMM internal data, company financial statements, SAIC and industry associations.
Macro Headlines
On April 1, Chinese government announced that China is going to set up Xiong'an New Area in Hebei province. The Xiong'an New Area is surrounded by Beijing, Tianjin and Hebei with strategic significance in transportation, environment and various resources. The development of the new area would bring a huge steel demand, especially that the market contribution of Hebei would be increased, while the exit of overcapacity in surrounding area including Bao- ding, Langfang would be hastened. The price of iron ore in Q1 decreased with great volatility, and the port stock of imported ore rose to a new record. Considering supply-side reform in steel industry, the oversupply of iron ore is expected to be constant in the foreseeable future, but it will barely influence the survival of steel mills.
Industry News
The growth rate of investment in steel industry has been negative for three consecutive years since 2014, and the capacity has been decreasing gradually; but recently the increasing in- vestment in real estate, infrastructure and environmental protection industries as well as the internal reform of steel mills both led to a recovery in the steel industry. The steel PMI in Q1 fluctuated around 50%, while the IPI of ferrous metal increased 20.7% YoY, with the PPI in- creased by 38.2% YoY, indicating an improvement in steel production and profitability this year.
SMM Credit Score
Company Name Area SCS Xilin Iron & Steel Group Co., Ltd. Northeast China 21 Tonghua Iron & Steel Group Co., Ltd. Northeast China 38
Benxi Steel Group Co., Ltd. Northeast China 56 Contacts Lingyuan Iron & Steel Co., Ltd. Northeast China 63 Supervisor: Fushun New Iron & Steel Co., Ltd. Northeast China 70 Song Libin +86 21 5166 6842; [email protected] Anshan Iron and Steel Group Co., Ltd. Northeast China 71 Primary Credit Analyst: Wang Yiting +86 21 5166 6832; [email protected] Xuanhua Iron & Steel Co., Ltd. Hebei 41
Research Contributors: Xingtai Iron & Steel Co., Ltd. Hebei 50
Si Wenjing +86 21 5166 6836; [email protected] Chengde Iron & Steel Group Co., Ltd. Hebei 57
Liu Jiazhen +86 21 5166 6818; [email protected] HBIS Group Tang Steel Co., Ltd. Hebei 60 Xinxing Ductile Iron Pipes Co., Ltd. Hebei 63
Handan Iron and Steel Group Co., Ltd. Hebei 63
SMM Information & Technology Co., Ltd. Shougang Iron & Steel Group Hebei 66 Address: 9th Floor in South Section, Building 9, Hebei Jinxi Steel Stock Co., Ltd Hebei 70 Lujiazui Software Park, No.20, Lane 91, E’Shan Road, Pudong New Area, Shanghai, 200127, China Tangshan GuoFeng Iron & Steel Co., Ltd. Hebei 73 Website: www.metal.com Hesteel Group Shisteel Company Hebei 75 Fax: +86 21 5127 5001 Hebei Puyang Iron and Steel Co., Ltd. Hebei 79
2017Q1 SCS of Steel Industry 1
SMM Credit Services
Company Name Area SCS Tianjin Tiantie Metallurgical Group Co., Ltd. North China 36 Baotou Iron & Steel (Group) Co., Ltd. North China 55 Taiyuan Iron & Steel (Group) Co., Ltd. North China 64 Rockcheck Steel Group Co., Ltd North China 71 Jinan Iron & Steel Group Co., Ltd. East China 47 Laiwu Iron & Steel Group Co., Ltd. East China 59 Zhejiang Yuanli Group Co., Ltd. East China 59
Jiangxi Pingxiang Iron & Steel Co., Ltd. East China 62 Jiangsu Yonggang Steel Group Co., Ltd. East China 62 Zenith Steel Group Co., Ltd. East China 63
Xinyu Iron & Steel Co., Ltd. East China 69
Jiangsu Shagang Steel Group Co., Ltd. East China 70
Fangda Special Steel of Science and Technology Co., Ltd. East China 71
Baoshan Iron & Steel Co., Ltd. East China 73 Nanjing Iron & Steel Co., Ltd. East China 78
Shiheng Special Steel Group Co., Ltd. East China 81
Ma’anshan Iron & Steel Co., Ltd. East China 81
Fujian Sanming Steel (Group) Co., Ltd. East China 84
Guangdong Shaoguan Iron & Steel Co., Ltd. South China 65
Guangxi Liuzhou Iron & Steel (Group) Co., Ltd. South China 69 Wuhan Iron & Steel Group Echeng Iron & Steel Co., Ltd. Central China 42
Hunan Valin Lianyuan Iron & Steel Co., Ltd. Central China 55 Anyang Iron & Steel Co., Ltd. Central China 56
Henan Jiyuan Iron & Steel (Group) Co., Ltd. Central China 59 Hunan Valin Xiangtan Iron & Steel Co., Ltd. Central China 65 Wuhan Iron & Steel Co., Ltd. Central China 74
Shaanxi Longmen Iron & Steel (Group) Co., Ltd. Northwest China 37
Baosteel Group Xinjiang Bayi Iron & Steel Co., Ltd. Northwest China 39
Jiuquan Iron & Steel (Group) Co., Ltd. Northwest China 55 Sichuan Chuanwei Group Co., Ltd. Southwest China 21 Wukun Iron & Steel Co., Ltd. Southwest China 38 Shuicheng Iron & Steel (Group) Co., Ltd. Southwest China 44
Pan’gang Group Company Limited Southwest China 52
● In 2016, Ma’anshan Iron & Steel Co., Ltd. got out of the red successfully after a series of internal reform. The enterprise outperformed most steel mills with a sales revenue of RMB 48.2 billion (YoY growth of 7.02%). Also, the share price of the enterprise increased with some fluctuation, which attracted much attention from the investors. ● Benxi Steel Group Co., Ltd. was an average performer in Q1 due to the long-standing problems in inventory turnover and production scheduling. But it is worth noticing that since this year, the enterprise has taken many measures to improve the productivity and new technologies have been applied. The performance of the enterprise is worth expecting in the next quarter. ● Affected by the more strict environmental protection policies, the target of steel de-capacity is tough in Tianjin in 2017. For Tianjin Tiantie Metallurgical Group Co., Ltd., more than 1.2 million tons of steel capacity is to be reduced, which is a great challenge for its poor operat- ing status: the large number of redundant labor and low utilization of equipment starves for innovation.
For information about other steel mills and more details such as financial models, operating status, solvency etc., please contact: Tel: 021-5166-6832 Email: [email protected]
In some cases, SMM Credit Score would be affected by unpredictable events. Factors such as macroeconomics situations, government regulations, com- petitions, mergers and acquisitions, and capital restructuring programs would result in varying degrees of impacts, which are inevitable. This report is an original work and/or a compilation by SMM, which holds the copyright thereto and is entitled to copyright protection under the Copyright Law of the People’s Republic of China and applicable international treaties. Without the prior written permission of SMM, neither this report nor its contents, in part or in whole, may be reproduced, revised, sold, transferred, displayed, translated, compiled, or otherwise disseminated. The contents of this report, including, but not limited to, any and all information, articles, data, tables, charts, photographs, audio and/or video recordings, logos, advertisements, trademarks, trade names, domain names, layout designs, are subject to protection under China’s Copyright, Trademark, and Unfair Competition laws, as well as applicable international treaties pertaining to the legal protection of copyrights, trademarks, domain names, commercial data, and other forms of intellectual property, and are owned and held by SMM, its rights and assigns. Without the prior written permission of SMM, neither this report nor its contents, in part or in whole, may be reproduced, revised, sold, transferred, displayed, translated, compiled, or otherwise disseminated. The views expressed in this report are based on a comprehensive assessment of available market information by SMM Research as of the date of publica- tion. This report is provided for reference only. Reliance on the contents hereof is as your own risk.
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