G West Steel 600 117 apparent involvement of incremental funding market outlook is expected to quic

Category: Money tips Release Date: 2007-02-06

Source: China Securities Journal Author: Wuhan New Rand

Company is in Northwest China's largest special steel production enterprises, produce high quality steel production capacity of 500,000 tons, 400,000 tons of quality steel products. The iron ore company's extensive investment in recent years has been a huge appreciation for the company has brought great benefits. In addition, the company is located in Qinghai Province, after the opening of the Qinghai-Tibet Railway Company to benefit significantly.
Technical point of view, the recent stock changing hands full, incremental funding to intervene clear afternoon is expected to rapidly pulled up.

Historical Information: G West Steel (600,117): to benefit the opening of Qinghai-Tibet Railway and the price of iron ore skyrocketing June 30, 2006

Source: Tiantong Securities Author: Zhang Rui

Thursday at the Bank to release funds against the backdrop of subscription broader market opened higher on high to go to the yang reported income, created a 11 Lian-yang's history. We note that China's stock market history, there have been only two 11-yang feat not even the first time in May 1992, at that time is an "old eight-legged essay" Time "is a prelude to China's stock market opening, but now A-share market has entered the "tradable era" has two major significance in the age of 11 with two yang feat can be said to be a symbolic milestone. Earlier in the day we can see hot spots and focus on blue-chip heavyweight body to prove that the value of investments, rational investment is still the mainstream.

G Baosteel which led to the overall strength of iron and steel blue-chip firm for promoting the broader market forces, in fact we note that a low-key adjustment from the broader market Wednesday steel plates had been once or the top spot, Thursday Stories behind Olympic Steel shares again, Baosteel, Wuhan Iron and Steel Continuous big inflation, Tangshan Iron and Steel, Shaoguan Iron & Steel closely followed, steel stocks in the week after quiet a long time been the main focus of capital favor. their underlying causes are worthy of analysis, we believe that with full circulation era, iron and steel and other industries so that these M & A Blue-chips, which have further highlighted the value of mergers and acquisitions, the value of a number of iron and steel chips were significantly undervalued, and in the steel price recovery in the steel under the revaluation of investment value and worth of funds into the current main focus on the object. The agreement in 2006 iron ore prices rose 19%, the whole chain of iron and steel industry, the profits of a gradual shift to the upstream, with iron ore, coke, iron and steel enterprises have obtained the resources at a lower cost than others, so that they could get a higher excess returns.

G West Steel (600,117) in recent years swept through Qinghai, Gansu, Inner Mongolia provinces of iron ore, iron ore has been huge investment in appreciation for the company brought huge benefits, it will be the biggest beneficiaries of soaring iron ore prices of the 1. Additionally, the company is located in Qinghai Province, it will also become opened during the weekend will be a huge beneficiary of the Qinghai-Tibet railway is another really good paired! Recently, the Unit has indicated that successive moderate heavy volume Buzz at the main wave of ambition, is expected to occur within a rapid increase in the short-term market, could be lot of attention.

Benefit from the Qinghai-Tibet Railway to face up to 400 thousand tons annual demand huge market S & P materials
After five years of hard work, the Qinghai-Tibet Railway has been achieved in the last year across the board-laying, will open July 1 trial operation. That is, in week six. With the Qinghai-Tibet Railway Completed, G West Steel will usher in an unprecedented development opportunity.

According to reports, the first improvement in transportation conditions will G West, ore and steel products, iron and steel output has brought great convenience. In addition, from Xining to Lhasa length of nearly 2,000 km, a total investment of 25.0 billion Qinghai-Tibet Railway, the latter will be used to maintain a large number of high-quality steel, while the G West Steel Investment western development, one of the key projects of small continuous steel rolling project, its products in the construction of the Qinghai-Tibet Railway has been widely used, thus the follow-up maintenance of the railway in the market has great potential, very good for the company's long-term development. Meanwhile, the opening of the Qinghai-Tibet rail freight for companies to develop Tibet & Poor's steel products market, a huge opportunity for development. The company will face annual demand reached 400,000 tons Pu material huge market. As the relative concentration of Pu-use steel products, versatility strong, so sales have regional characteristics, there is a certain radius of the sale. The west is in the early stages of infrastructure, steel demand is in a strong growth process, the Western Steel & Poor's steel production line fully operational in 2006, mainly based on the Qinghai and Tibet around the market. According to statistics, the Qinghai-year local market, S & P materials required 500,000 tons, Tibet-year S & P materials required 400,000 tons, will make the opening of the Qinghai-Tibet railway freight from Tibet, Xining Special Steel to become the latest steel production base, will be 40 per year million tons of Tibet S & P steel demand to provide the most powerful support. Therefore, the Western Steel & Poor's steel products, competitive advantage is very obvious location.

"Hoard" good potential for mineral companies staggering
International markets, the continuous price rise of iron ore, iron and steel enterprises produced a profit is not a small effect. G West Steel (600,117) net profit in recent years, slow growth, but the scale of investment is a significant increase, amounting to several billion yuan. Most investment funds invested in the acquisition of mining resources and the millions of tons of iron and steel projects. At present, the company already has two major iron ore and coke, iron and steel industry raw material resources, the company return on equity will gradually increase, the future performance of substantial growth as very promising.

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G West Steel since 2004 began in Qinghai, Gansu, Inner Mongolia, Xinjiang, a large number of acquired iron ore, respectively, and the formation of magnetic iron ore mining in Inner Mongolia, Gansu, Qinghai, iron ore and coking coal mining, Qinghai, iron ore mining The four subsidiaries, the four projects a total investment estimated more than 1.2 billion yuan. Xining Special Steel is rich in mineral resources in Qinghai Province, the company invest in iron ore and coal have been greatly appreciated and will be big fat "iron money", "coke Assets." June 27, 2006 the company will benefit Inner Mongolia pairs of iron ore industry to sell outside the company to 90 million yuan (company initially invested 40 million yuan), and increased investment in mining and metallurgy in Qinghai, the proportion of equity control up to 100%, so that the Qinghai Mining and Metallurgy became the company's wholly owned subsidiary. Xining Special Steel Holdings by 55% and Hami Industrial Co., Ltd. joint venture Great Wall in Gansu Subei Dahongshan iron ore reserves of 103 million tons, a 200,000 tons Tie Jingfen projects have been successfully production; Xining Special Steel, a wholly owned subsidiary of the Qinghai Metallurgy Technology Co., Ltd. is mainly carried out in Xinjiang Mining and Dressing iron work, a 200,000 tons and 1 million tons iron Tie Jingfen projects have been completed and commissioned. Muli River mine is located in Qinghai Province Haixi warehouse Tianjun Haibei Tibetan Autonomous Prefecture and Gangcha County, the mine's proven coal reserves of the province accounted for 66% of total reserves, coal-rich deposit is complete, with a low ash, low sulfur, coal seam thickness, coal quality is good, construct a single, easy to exploit the characteristics of a quality coking coal resources, is the largest coal mining area in Qinghai Province and coke base, but also to save our country at present the most perfect one coking coal origin. Xining Special Steel engaged in coal mining and coking, a subsidiary of Qinghai River Energy Development Co., Ltd has a warehouse 640 million tons of coking coal reserves in the Qinghai Province with 2.4 million tons / year coking coal mining, one million tons / year refined coal washing, 700,000 tons / year coal mining production capacity of metallurgical coke washing, metallurgical coke production lines. A 350,000 tons coking coke project has been put into production, coking two will be fully completed in October 2006. Iron ore and coke is the lifeblood of the steel industry, the lifeblood of Xining Special Steel to master these two will be the biggest winner.

Obviously, a huge resource advantage for the future development of G Steel has brought the West a strong stamina. G West Steel Company's Web site said the company after the completion of these large projects, performance will show explosive growth. Mine Subei Boren will realize sales income of 329 million yuan, profit of 112 million yuan; Hami Boren mine will realize sales income of 235 million yuan, profit 70 million yuan. In addition, the 650 million investment in the steel rolling works projects such as the completion of production, the company will also create millions of tons of steel to lay a solid foundation.

Cost advantage for the company products a strong competitive advantage
G West, the constituent elements of steel production costs, the electricity price, gas prices and water prices compared to other regions special steel enterprises have an obvious advantage. Abundant hydropower resources in Qinghai Province, and an adequate power supply, the relevant departments to encourage enterprises to more power, much cheaper price compared to other regions. According to G Western Steel Co., Ltd. to historical data, the domestic steel enterprise's comprehensive power consumption 1233.5KWH, price of 0.47 yuan / KWH, Xining Special Steel electricity price of 0.33 yuan / KWH, compared to other companies an average of less than 30%, significantly lower the cost of electricity consumption per ton of steel compared with other enterprises with 172.69 yuan advantages; Xining Special Steel is located in Qinghai Province, Xining City, is Xining - Lanzhou, the first stop of natural gas pipelines, G West, steel prices are low compared with other enterprises 0.3 Yuan / cubic meters of natural gas consumption per ton of steel costs 63 yuan lower than that of other companies; Xining Special Steel has the advantage of water resources, domestic steel companies tons of steel on average water consumption of 86.6 tons, compared with other enterprises, low price 0.1 yuan / tons of water per ton of steel than the other companies low cost 8.66 yuan. Only these three together, the cost per ton of steel than other enterprises are 244.35 yuan a price advantage.

Additionally, the company store energy companies Jiang a 35-million tons of coke had been put into operation in 2005; another 350,000 tons coke will also be put into operation in November 2006. All sales to the West because of coke used in iron & Steel Group production, in enhancing the overall profitability of the same time, the company can make full use of internal resources in order to lower costs to compete, resulting in periodic fluctuations in the iron and steel production to maintain the stability of business performance. The interface between the product lines, but also makes the S & P special steel production line can be the direct use of iron-baked hot metal, molten iron against the implementation of the electric furnace process, smelting not only shorten the time-consuming as well as lower energy consumption and other year 8000 for the company to reduce costs million.

Based on the above analysis, we believe that G West Steel (600,117) in 2006, will embark on a new starting point, company performance will rapidly increase the company's future profit growth the main point is added, the whole process in front-end resource value of the company's extensive mineral resources will be In 2006,2007 to full commissioning year has brought huge profits for the company; in 2006 the opening of the Qinghai-Tibet Railway has brought new opportunities for the company, the company's location and policy advantages will be better reflected; with the company's vertical industry chain integration extends the development strategy to move forward, we expect the performance of the company 06-07 years there will be a rapid growth. Increase in volume on the secondary market, stock prices go, the main signs of significant financial involvement, in 2006 a quarterly report on the disclosure of the number of femoral artery and compared with the previous reporting period, a reduction of 10%, the main collection of chips reveal behavior is no doubt, another of the top ten shareholders of multiple investment funds the main, most new entrants for the current high proportion of the fund and the holdings are investment funds that the company's bullish outlook. 60 minutes from the graphical view, the Unit has built a large head and shoulders bottom patterns, Thursday's high-volume breakout has indicated that the unit will soon benefit from the iron ore price rise with excitement and Saturday the opening of the Qinghai-Tibet Railway appeared accelerated market, taking into account current the market has not perceive value in front-end resources, the potential, we recommend investors to focus on.

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