HK Stock Market Move | Most iron and steel stocks are falling, and the overall profitability of the iron and steel industry is still at a cyclical low. The market-to-book ratios of many ordinary and special steel companies have been significantly reduced.

Most of the steel stocks fell, as of the deadline, APAC RESOURCES (01104) fell by 4.27% to HK$1.57; MAANSHAN IRON (00323) fell by 3.47% to HK$1.67; Angang Steel (00347) fell by 1.65% to HK$1.19; CHONGQING IRON (01053) fell by 1.11% to HK$0.89. On the news front, recently, several steel companies have issued profit warnings for the first half of 2026. Maanshan Iron and Steel Co. Ltd. expects to achieve a net loss attributable to shareholders of the company of approximately RMB 72 million in the first half of 2026, a decrease of approximately RMB 3 million compared to the same period last year; Angang Steel Co. Ltd. expects to achieve a net loss attributable to shareholders of the company of approximately RMB 2.047 billion in the first half of 2026, an increase of approximately 83.59% year-on-year; the estimated non-recurring net loss is approximately RMB 2.109 billion, an increase of approximately 71.32% year-on-year. Cinda pointed out that, based on the disclosed enterprises, the overall profitability of the industry is still at a cyclical low, with enterprises such as Angang Steel and Bengang Steel Plates still having a large anticipated loss, and the industry's widespread losses have not fundamentally reversed. However, Cinda stated that it is worth noting that the above-mentioned negative influences on performance have already been fully reflected in the current stock prices, as shown by recent adjustments. The price-to-book ratios of many general steel targets have fallen below 0.5 times, while the price-to-book ratios of special steel targets have also shown a significant decrease, with the sector valuations in a historically low range. The bank believes that as the negative effects of interim results are concentrated, the market's "shoe-drop" effect may become evident, and there is limited further downward adjustment space for sector valuations. Overall, with a long-term improvement in supply and demand situation, short-term cost support strengthening, and low sector valuations, the steel sector is expected to witness value restoration and investment value becoming more prominent.