Technical tracker - HLIB Retail Research – 4 April 2022 HIAPT | HLeBroking
Technical tracker - HLIB Retail Research – 4 April 2022
HIAPTEK: Riding through challenges
Steel prices rising. Following the Ukraine-Russia conflict, steel rebar and hot rolled coil (HRC) prices have resumed their upward trajectory, rising 12% and 8% YTD, respectively, owing to the disrupted logistics, sanctions, and skyrocketing energy prices. World steel’s supply and demand dynamics turned tight given that Russia and Ukraine play an essential role in supplying steel products to the world, which accounted for about 10% of the international steel trades. This situation is further worsened after China announced a city-wide lockdown amid its Zero-COVID policy, which kept steel output subdued. Tangshan, which accounted for ~15% of China’s total steel output, has been in lockdown since 20 Mar, resulting in daily production loss of 30k-35k tonnes. Moreover, EU steel makers are beginning to slash their output as the higher costs make production unsustainable.
Better earnings visibility in 2HCY22. We reckon HIAPTEK’s tepid lacklustre 2Q might extend into 3Q as the rising steel prices since March will not be reflected due to the lag effect (~2-month lag). Moreover, factory shutdowns due to CNY will translate to lower revenue in 3Q. Beyond that however, HIAPTEK is expected to report stronger earnings, thanks to the higher ASPs coupled with recovering steel demand after the CNY. We gather that the private sector is the one driving the steel demand now, with momentum picking up from the property and manufacturing sector. On the other hand, demand from the public sector (e.g. infrastructure) is expected to pick up in 2HFY22. Hence, we opine that investors should look beyond the potential lacklustre 3Q in anticipation of a more exciting 4Q and FY23 earnings.
The carbon emission target. As China still maintains a strict adherence to the global carbon emissions targets by 2025-2050, this could result in a loss in steel capacity from the top steel-producing countries. The supply-demand mismatch is expected to alter the shape of the world steel supply, cushioning any downward movement in steel prices. To recap, China is committed to achieving its steel output reduction target − crude steel output not higher than the 1.065bn MT it made in 2020 − to meet its carbon emission by 2025. The Chinese government has ordered major steel mills nationwide to either reduce or stop production altogether to achieve this target. International Energy Agency foresees Chinese steel production to slide by 40% in 2060 compared to 2020 levels. As China produced ~52% of the world's steel in 2021, the lost supply is likely to be partially fulfilled by new capacity from ASEAN countries.
Accumulate during weakness. After plunging 36% from a 52-week high of RM0.68 to RM0.43 last Friday, HIAPTEK is currently trading at its mid-term support area of RM0.40-0.43. A decisive breakout above RM0.475 will indicate a new uptrend leg had happened, and spur the prices toward RM0.50-0.54 levels. Cut loss at RM0.37
HIAPTEK：克服重重挑战
钢材价格上涨。乌克兰-俄罗斯冲突后，由于物流中断、制裁和能源价格暴涨，螺纹钢和热轧卷 (HRC) 价格已恢复上涨趋势，年初至今分别上涨 12% 和 8%。鉴于俄罗斯和乌克兰在世界钢铁产品供应链处于重要的地位，占国际钢铁贸易的 10% 左右，世界钢铁的供需动态变得紧张。该情况在中国因“零新冠病毒”政策实施全市封锁后，进一步恶化，导致钢铁产量低迷。占中国钢铁总产量约 15% 的唐山自 3 月 20 日以来一直处于停工状态，导致日产量损失 30k-35k 吨。此外，由于较高的成本使生产不可持续，欧盟钢铁制造商开始削减产量。
2HCY22 的盈利能见度更高。我们认为 HIAPTEK 第二季度的低迷表现可能会延续到第三季度，因为滞后效应（约 2 个月），故自 3 月以来的钢价上涨将无法反映。此外，由于农历新年工厂停工将导致第三季度的收入下降。然而，我们预计 HIAPTEK将于3QFY22过后可能会公布更强劲的收益表现，这要归功于更高的平均售价以及钢铁需求在农历新年后的复苏。我们认为，私营部门是目前推动钢铁需求的主要因素，以房地产和制造业的需求所带动。另一方面，公共部门（例如基础设施）的需求预计将在 2HFY22 年回升。因此，我们可以乐观期待更令人兴奋的第四季度和 23 财年盈利。
碳排放目标。由于中国仍严格要求达成 2025-2050 年的全球碳排放目标，这可能导致最大钢铁生产国的钢铁产能损失。该供需不平衡预计将改变世界钢铁供应的格局，并缓冲钢铁价格的下行风险。中国致力于实现其钢铁减产目标（粗钢产量不高于其 2020 年的 10.65 亿吨）以实现 2025 年的目标碳排放量。为了达成该目标，中国政府已下令全国主要钢厂减产或完全停止生产以实现这一目标。国际能源署预计，与 2020 年相比，2060 年中国钢铁产量将下滑 40%。由于中国在 2021 年生产了全球约 52% 的钢铁，因此失去的供应可能部分由东盟国家的新产能来弥补。
低迷阶段买入。在上周五从RM 0.68 的 52 周高位暴跌 36% 至 RM0.43 后，HIAPTEK 目前交易于 RM0.40-0.43 的支撑区域。股价若突破 RM0.475 将表明已经发生了新的上升趋势，并将推动价格向 RM0.50-0.54 水平。投资者可以把止损设置在 RM0.37
买入范围：RM0.39-0.40-0.43
上行目标：RM0.47-0.50-0.54
止损：RM0.37
