HC: The global iron market has received a new shock … and we may not see improvement before 2021

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HC Securities shed light on the iron industry in Egypt under the current global conditions, and said in a report that «the global iron market received a new shock, and we may not see improvement before 2021».

Maryam Ramadan, HC industry analyst, said in a statement that the global iron market had begun to recover after the difficulties of 2019, as this year the iron industry faced trade wars, weak economies and a weak auto sector, with high prices and profit margins in The first two months, before a coronavirus outbreak and declining oil pose a risk to their recovery.

Ramadan added that the fact that Egypt is the market on which the Ezz Steel Company is based is a positive thing, as the construction sector in particular enjoys the continuation of its activity as usual, at least for existing projects, where the government is betting on it to push the economy at the present time, which is evident in the current sales volumes. “Domestic consumption is slightly higher in the first quarter of the year 20 on an annual basis.” This, coupled with the reductions in energy prices and the extension of high protective tariffs, gave a truce to the sector domestically.

He expected Ezz Steel to continue to incur losses over the past two years before turning into profitability in 2023. It reduced the target price per share by approximately 37% to reach EGP 7.5 per share, making the company an expected EV-EBITDA multiple for 2021 of 8.4 points. 8.8 points »It promises a 3.0% potential return on the April 30 closing price of 7.3 EGP per share.

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