From November 15, 2007, Masteel CWB1 entered the first exercise period. Whether investors should exercise their rights to Masteel CWB1 and whether the exercise is cost-effective for the holders of Masteel CWB1 warrants, we will make a simple explanation on this issue. Theoretically, if you look forward to the future Masteel The holding of Maanshan Iron and Steel Co., Ltd. CWB1 is more profitable than that of Maanshan Iron and Steel Co.
In the middle of 2007, the earnings per share of Masteel was 0.168 yuan. According to the data provided by Wande Information, citic securities Ten securities companies, including Shenyin Wanguo, predicted that the annual earnings per share of Maanshan Iron and Steel Co., Ltd. in 2007 would be about 0.4 yuan, and the current stock price would correspond to a P/E ratio of about 27 times in 2007. According to the information provided by Wande Information, on September 20, 2007, the 5 million ton new area project of Masteel, with an investment of more than 20 billion and a world-class level of steel manufacturing, was successfully completed and put into operation. Masteel has thus stepped onto the stage of an annual output of 1600 tons of steel. According to this calculation, ten securities companies, including CITIC Securities and Shenyin Wanguo, are expected to achieve earnings per share of 0.6-0.7 yuan in 2008, The current stock price of Magang shares corresponds to a P/E ratio of about 16 times in 2008, which is far lower than the average level of the current market. In the long run, the current stock price of Magang shares has high investment value.
In the short term, there are also some unfavorable factors for holding Maanshan Iron and Steel CWB1 warrants. 1. Since the beginning of 2006, the A-share market has risen as much as 373.33%. It is inevitable that the stock index will fluctuate significantly at this point, while the warrant may fluctuate more than the underlying due to the leverage effect shares ; 2. The main business of Maanshan Iron and Steel Co., Ltd. is ferrous metal smelting, rolling processing and manufacturing, which is a typical cyclical industry. Its performance is greatly affected by the macro-economy and will fluctuate to some extent; 3. From November 15 to 28, 2007, it was the first exercise period of Maanshan Iron and Steel Co., Ltd.'s warrants. During the exercise period of the warrants, the trading of the warrants was suspended, while Maanshan Iron and Steel Co., Ltd.'s shares could still be traded normally. Due to the long suspension time of the warrants, if during the suspension period of Maanshan Iron and Steel Co., Ltd. CWB1 warrants, Sharp fluctuations in the A-share market will inevitably lead to sharp price fluctuations after the resumption of trading of Masteel CWB1 warrants. Investors holding such adverse factors as Masteel CWB1 should be fully prepared. Whether Masteel CWB1 warrant holders choose to exercise or continue to hold Masteel warrants depends on the risk preference of the warrant holders and their judgment on the long-term intrinsic value of Masteel shares.
Ma Steel Warrant Primary Dealer Guoyuan Securities Co., Ltd
