According to the Zhitong Finance app, steel stocks extended their gains in the afternoon, as of the deadline for the article, Maanshan Iron (00323) rose by 8.62%, to 1.26 Hong Kong dollars; Chongqing Iron (01053) rose by 5.26%, to 1 Hong Kong dollar; Angang Steel (00347) rose by 3.55%, to 1.46 Hong Kong dollars; China Oriental (00581) rose by 2.63%, to 1.17 Hong Kong dollars.

On the news front, on November 15th, the CSRC issued market cap management guidelines, setting special requirements for major index component stocks to formulate market cap management system and long-term undervalued companies to disclose valuation enhancement plans. Caixin Securities believes that at present, the A-share long-term undervalued companies mainly focus on banks, non-banking financial institutions, real estate, steel, construction, and transportation, six traditional industries. With the implementation of the new market cap management regulations, it is expected that the above-mentioned industries will have some valuation repair space.

Huachuang Securities pointed out that although the industry's profitability has been different recently, benefited from the results of the 2016 supply-side reform, most steel companies have excellent indicators such as asset-liability ratio, available cash, undistributed profits, and their stock prices are significantly undervalued; the steel sector has a concentration of companies trading below net asset value, and many of them have proactively maintained their market cap. The CSRC has issued guidelines on market cap management for listed companies, and many companies have already announced or implemented buyback plans to proactively maintain their market cap; the steel industry is about to reach a turning point. The largest-scale debt restructuring in history and real estate support policies are successively introduced, downstream demand will significantly improve. Profits in the industry have been declining for the past three years, small and medium-sized enterprises are starting to exit, and the industry structure continues to optimize. With efforts from both supply and demand sides, the turning point is imminent.