Deutsche Bank issued a report that gave China Iron and Titanium (00893-HK) a "buy" rating of Rmb2.50, reflecting more than 43 per cent of the rise, corresponding to a price-to-earnings ratio of 7.5 times forecast 2012. Deutsche Bank said that the company is the largest producer of iron ore concentrate among iron ore miners listed in Hong Kong. It is believed that its active acquisitions in recent years will also help future growth, and the company's gross profit margin is expected to remain above 40 per cent in the next three years.

The bank believes that iron ore stocks are currently at a cyclical trough, and it is believed that with the continued growth of the industry in the future, there will eventually be a cyclical recovery. Compared with the steel industry, which is still facing problems such as oversupply and fragmentation of the industry, iron ore stocks have higher returns, limited room for decline and lower valuations.