Market capitalization of Japanese 5 integrated steel makers increased to 10.118 trillion yen at the end of March, which was 1.9 times of 5.372 trillion yen a year earlier. The increase rate of their stock prices were 1.5-2.6 times in a year, which were much higher than 46% for the Nikkei average, when domestic and foreign investors increased the steel stock due to better financial results. However, the price earnings ratio is still around 10 times for Nippon Steel and JFE Holdings. They have to keep the high level earnings to improve the relative lower market evaluation than averaged 20 times for companies listed in Tokyo Stock Exchange. Foreign investors represented averaged 21.4% of their shareholders, which increased by 3.7 percentage points from 17.7% a year earlier while individual investors’ rate decreased by 3.7 points from 27.4% to 23.7%. Nippon Steel, JFE Holdings, Sumitomo Metal Industries and Kobe Steel posted record consolidated recurring and net profit for the year to March 2006. Nisshin Steel is also expected to post record consolidated recurring profit. Nippon Steel’s market capitalization increased to more than 3 trillion yen and JFE and Sumitomo Metals increased the value to much more than 2 trillion yen. Kobe Steel’s value reached 1 trillion yen and Nisshin Steel’s value increased to 400 billion yen. Mr. Atsushi Yamaguchi, senior analyst for UBS Securities said foreign investors already expanded interests in symbolic Japanese maker, Nippon Steel though the firm’s foreign investor rate decreased at the end of March. Mr. Yamaguchi said Japanese steels’ lower PER is due to traditional market recognition that steel is cyclical industry. He said Japanese steels have to keep the high level profit for another several years to change the market view.
Japan Steel Scrap Composite Prices (Sangyo Press)05/24/2018
|34400YEN (100)||38600YEN (100)|
|310.78US$ (4.2)||348.72US$ (4.6)|
* Average of electric furnaces steel maker's purchasing price in Tokyo, Osaka and Nagoya (per ton)