China Steel Corporation : We expect the end of the technical rebound

05/14/2020 | 08:57am EST

David Meurisse

short sell Stop-loss triggered

Entry price : 19.85TWD | Target : 17.5TWD | Stop-loss : 21.1TWD | Potential : 11.84%

The end of the technical rebound appears close for stocks in China Steel Corporation following the recovery of the past few days. Investors should open a short trade and target the TWD 17.5.

Summary

• In view of fundamental criteria, the company is among low performers as far as mid or long-term investment strategy is concerned.

Weaknesses

• According to Standard & Poor's' forecast, revenue growth prospects are expected to be very low for the next fiscal years.
• The company sustains low margins.
• The company is in a hindered financial situation with significant debt and rather low EBITDA levels.
• With an expected P/E ratio at 553.08 and 32.52 respectively for both the current and next fiscal years, the company operates with high earnings multiples.
• The company's sales previsions for the coming years have been revised downwards, which foreshadows another slowdown in business.
• For the last twelve months, the trend in sales revisions has been clearly going down, which emphasizes downgraded expectations from the analysts.
• For the past seven days, analysts have been lowering their EPS expectations for the company.
• For the last twelve months, the analysts covering the company have given a bearish overview of EPS estimates, resulting in frequent downward revisions.
• For the past year, analysts have significantly revised downwards their profit estimates.
• Below the resistance at 21.8 TWD, the stock shows a negative configuration when looking looking at the weekly chart.

© MarketScreener.com 2020

	Stocks mentioned in the article	Change	Last		1st jan.
	BYD COMPANY LIMITED	9.35%	278.4		37.01%
	CHINA STEEL CORPORATION	1.27%	23.95		-3.23%

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