Expect A Strong Set Of Results For 1H21
The stronger-than-expected steel market performance ytd has fuelled a strong earnings recovery across steel mills. We are positive on steel companies’ earnings performances in the traditional demand peak season (August to November), with raw material costs set to ease and supply to remain tight. Angang’s 1H21 profit alert surprised the market on the upside. We expect the positive surprise to trigger a valuation recovery across the sector in the near term. Maintain OVERWEIGHT. Top picks: Angang, Baosteel.