【出版时间及名称】：2010年3月南美钢铁与矿产行业研究报告
【作者】：摩根大通
【文件格式】：pdf
【页数】：29
【目录或简介】：


Due to the completion of J.P. Morgan’s involvement in the transaction announced on
December 29, 2009, we are resuming coverage of CSN with a Neutral rating and a
Dec 10 price target of $45.0 (previously a Dec 10 price target of $40.0). We are also
upgrading Usiminas to Neutral from UW with a new Dec 10 price target of R$68.5
(previously R$56.0). Finally, we update our forecasts and price targets for Vale (OW)
and Bradespar (N), mainly accounting for new iron ore pricing assumptions.
• Welcome to another period of rising steel raw material costs. After revising coal
prices upwards (from $175 to $200/tonne), today J.P. Morgan revised upwards iron
ore pricing assumptions for 2010 to a 65% hike based on a push toward marketbased
pricing by miners and a tight supply/demand for iron ore. Steel raw material
prices are on the rise.
• Higher raw materials = stronger steel prices. Higher raw material costs should lift
the steel cost curve in an uneven way, making it steeper. Low cost, integrated
producers should benefit from this as marginal cost producers should drive a
movement of correction in steel prices. Brazilian flat steel producers should be clear
winners in this scenario. We now expect to see prices up in the international markets,
which should allow room for ~10% hike in average flat steel prices in Brazil.
• Upgrading Usiminas from UW to N based on the improved pricing outlook for
steels and volume recovery. The company has also adopted a more market friendly
strategy with improved disclosure and plans to potentially unlock value on its
mining business unit, which we view as a positive move. Usiminas trades at 7.3x and
5.8x estimated EV/EBITDA for 10 and 11. Our new R$68.5/share Dec 10 target
price implies 21% upside potential.
• CSN: resuming coverage with a Neutral rating and a $45.0 price target. CSN
has recently announced a very interesting and aggressive strategy based on (a)
organic growth; (b) unlocking value by listing all its business units separately; and
(c) complementing organic growth with M&A opportunities. However, we believe
that investors have already priced the bulk of the good news into CSN’s stock price.
Execution and M&A are the main risks we see on the company. CSN trades at 7.5x
and 5.3x estimated EV/EBITDA for 10 and 11, and our new $45.0/share Dec 10
target price implies 17% upside potential.
• Vale: best vehicle to get exposure to iron ore. Incorporating higher iron ore price
forecasts and adjusting among others to 4Q09 results, we have adjusted our
estimates for Vale and continue to see it as the best way to gain exposure to the iron
ore market. Our new Dec 10 PTs are $39.5/ADR and $34.5/ADR for ONs and PNs,
implying upside of 31% and 30%, respectively. The company trades at EV/EBITDA
of 8.0x and 5.9x for 10e and 11e, at a marginal premium to the global diversified
peer average of 7.6x and 5.8x, respectively, which we believe is justified given
Vale’s higher exposure to iron ore. Finally, we remain Neutral on Bradespar given
the recent narrowing of its discount to NAV to above historical average levels. Our
new R$52.5/share Dec 10 target price implies 27% upside potential.