Fact based stock research
China Steel (TSEC:2002)

TW0002002003

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

China Steel stock research in summary

csc.com.tw

ANALYSIS: With an Obermatt Combined Rank of 4 (worse than 96% compared with investment alternatives), China Steel (Steel, Taiwan) shares have lower financial characteristics compared with similar stocks. Shares of China Steel are low in value (priced high) with a consolidated Value Rank of 13 (worse than 87% of alternatives), show below-average growth (Growth Rank of 29), and are riskily financed (Safety Rank of 6), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 4, is a sell recommendation based on China Steel's financial characteristics. As the company China Steel's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 13), low growth (Obermatt Growth Rank of 29), and risky financing practices (Obermatt Safety Rank of 6), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	13
Growth Rank	29
Safety Rank	6
Combined Rank	4

Country	Taiwan
Industry	Steel
Index	Low Emissions, Energy Efficient, SDG 11, SDG 12, SDG 8, Water Efficiency, FTSE Taiwan
Size class	XX-Large

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

Review the performance ranks of the individual metrics that form each investment strategy.

Research History: China Steel

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	54	19	12	13
GROWTH
GROWTH	68	91	17	29
SAFETY
SAFETY	27	10	6	6
SENTIMENT
SENTIMENT	n/a	80	8	^new
360° VIEW
360° VIEW	n/a	47	1	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better China Steel is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	54	19	12	13
GROWTH
GROWTH	68	91	17	29
SAFETY
SAFETY	27	10	6	6
COMBINED
COMBINED	49	16	4	4

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of China Steel the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 13 (worse than 87% compared with alternatives), China Steel shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for China Steel. Price-to-Sales is 49 which means that the stock price compared with what market professionals expect for future profits is higher than 51% of comparable companies, indicating a low value concerning China Steel's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 36, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of China Steel. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 3 and Dividend Yield, which is lower than 70% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 13, is a sell recommendation based on China Steel's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for China Steel? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as China Steel? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. China Steel may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	45	39	43	49
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	53	34	1	3
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	54	33	38	36
DIVIDEND YIELD
DIVIDEND YIELD	44	20	18	30
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	54	19	12	13

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of China Steel; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 29 (better than 29% compared with alternatives), China Steel shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four metrics below average for China Steel. While Profit Growth has a good rank of 90, as professionals currently expect the company to grow its profits more than 90% of its competitors, all other growth indicators are below market averages. Sales Growth has a rank of 11, which means that currently professionals expect the company to grow less than 89% of its competitors, while Capital Growth has a rank of 22 and Stock Returns have been below market median, with a rank of 27 (73% of alternative investments were better). ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 29, is a hold recommendation for growth and momentum investors. While revenue growth and capital growth are good growth momentum indicators, profit is less reliable, because profits may increase due to cost-cutting measures which typically indicate negative growth momentum. "You can save a dollar only once" is the saying about such situations. Growth Investors should look at company priorities closely if they are interested in growth, because the increase in profits is not usually an indicator of growth, and stock prices have been below market, too. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is limited here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	55	44	73	11
PROFIT GROWTH
PROFIT GROWTH	50	100	1	90
CAPITAL GROWTH
CAPITAL GROWTH	n/a	79	25	22
STOCK RETURNS
STOCK RETURNS	64	69	27	27
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	68	91	17	29

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of China Steel.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 6 (better than 6% compared with alternatives), the company China Steel has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of China Steel is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with all three metrics below average for China Steel. Liquidity is at 14, meaning that the company generates less profit to service its debt than 86% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 18, meaning the company has an above-average debt-to-equity ratio. It has more debt than 82% of its competitors. Finally, Refinancing is at a rank of 17 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 83% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 6 (worse than 94% compared with alternatives), China Steel has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing. Investors should look at Obermatt’s Value, Growth, and Sentiment Ranks to confirm a very positive outlook or be careful with investing in stocks of China Steel because it may suffer significantly in case of future difficulties. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	22	30	26	18
REFINANCING
REFINANCING	70	13	3	17
LIQUIDITY
LIQUIDITY	24	21	35	14
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	27	10	6	6

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of China Steel and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	37	10	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	39	21	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	75	12	^new
MARKET PULSE
MARKET PULSE	n/a	89	86	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	80	8	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for China Steel.
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