While a two-day suspension of operations at its No. 1 blast furnace because of a fire on Tuesday may not cause much harm to China Steel Corp (中鋼), the company is likely to see declining profits in the second half of the year because of steel oversupply from Chinese mills, analysts said.
The nation’s biggest steelmaker said in a stock exchange filing yesterday that its No. 1 furnace would soon resume operations after completing inspections and repairs, reiterating that the fire would have no major impact on its annual production.
However, Credit Suisse analyst Sidney Yeh (葉昌明) said in a report yesterday that the company’s earnings outlook for the second half of the year was uncertain because of high inventory levels in China.
“Some investors were hoping for profit recovery in the fourth quarter given the softening of raw materials. However, we believe the timing of the steel price rebound will be pushed back given the slow pace of de-stocking in China,” Yeh wrote.
Credit Suisse revised down its earnings forecast for China Steel by 8 percent, to NT$2.62 per share this year. The brokerage maintained a “neutral” rating on the stock, but lowered its target price to NT$34.3 from NT$34.7.
JPMorgan analyst Nick Lai (賴以哲) said yesterday in a separate note that he expected China Steel to impose more price cuts during the rest of the year, after a 4 percent cut for September shipments was announced on Tuesday — affecting full-year profitability.
JPMorgan downgraded China Steel to “neutral” from “overweight,” and lowered its target price for the stock to NT$32 from NT$40.
Tesla Inc temporarily halted some production at its auto assembly plant in California because of problems with its supply chain, but work has begun to resume, CEO Elon Musk told employees in an e-mail on Thursday. “We are experiencing some parts supply issues, so took the opportunity to bring Fremont production down for a few days to do equipment upgrades and maintenance,” Musk said in an all-staff message seen by Bloomberg. The factory was “back up and running as of yesterday,” and would rapidly ramp up to full production of Model 3 and Model Y cars “over the next several days,”
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to post a 25 percent year-on-year increase in sales in the first quarter of this year to US$12.91 billion, up from US$10.31 billion a year earlier, as its production is at full capacity, market advisory firm TrendForce Corp said in a note last week. The increase would help TSMC cement its leadership in the industry by taking a 56 percent market share in the global pure wafer foundry business, TrendForce said. Its forecast was in line with TSMC’s estimate in January, which pointed to a range of US$12.7 billion to US$13 billion for the
MULTI-USE: The arrangement of seats in future vehicles would be different, allowing passengers to do everything they do at home, the CEO of the firm’s EV platform said Electric vehicles (EVs) developed on a Hon Hai Precision Industry Co (鴻海精密) platform would be built like “a smartphone on a different platform,” Jack Cheng (鄭顯聰), chief executive officer of the Hon Hai-initiated MIH Open Platform Alliance, said on Saturday. It would be the ultimate goal to make vehicles built on the platform an extension of the driver’s home, he said during an online presentation. The alliance aims to provide resources to automakers and boost Taiwan’s EV development, with a vision to make an EV its owner’s “second home,” Cheng said. “Whatever they can do in their home, they will be able
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) was on Thursday set to sell local currency bonds, as it prepared for a spending blitz amid a global chip shortage. The world’s largest contract chipmaker planned to price about NT$16 billion (US$565.25 million) of notes in three parts in an auction, though the actual issuance size might change. The manufacturer would have to contend with a recent rise in rates globally that has sent many corporate bond yields up from record lows in the past few weeks. The debt offering comes at a promising time for the semiconductor industry as the world scrambles its way