CSC at NT$18 – Tempted to Buy the Dip? Expert Reveals 3 Key Signals: The Spring Swallow Is Still on the Way, Don’t Rush In

China Steel Corporation (CSC) is a popular long-term investment among veteran investors, but its stock has been fluctuating around NT$18 recently, causing many to lose confidence and wonder when a rebound might occur. Financial expert Gu-Ren Ashun, known as 'Stock Investor Ashun,' recently posted on Facebook stating that while CSC at NT$18 appears extremely cheap based on price-to-book (P/B) river charts, investors should carefully examine three key factors before deciding whether to enter now.

Ashun notes that for the past five years, many steel sector shareholders have been waiting for the legendary 'spring swallow' to return. However, the stock has been trading sideways between NT$18 and NT$22 for over a year. More painful than losing money, he says, is having capital locked up in a stagnant market with no momentum.

Recently, CSC’s share price has dipped back to NT$18. Based on P/B river charts, it does appear very cheap, prompting many 'buy-the-dip' investors to feel tempted: 'It’s so cheap—should we jump in now?'

The conclusion, Ashun stresses, is that a low stock price alone won’t drive growth—only a 'turning point' in earnings will spark a surge.

Before rushing in to catch a falling knife, Ashun urges investors to ask: Have the structural issues that previously suppressed CSC’s performance been resolved?

First, China’s domestic overcapacity and low-price dumping: China’s real estate and infrastructure sectors remain weak, leaving excess steel production with no domestic outlet. This surplus is being dumped globally at low prices, directly suppressing global steel prices and compressing CSC’s market share and gross margins.

Second, the traditional Q3 off-season: High summer temperatures and typhoon season slow construction progress. Recently, major Asian steelmakers have revised their prices downward, and CSC faces competitive pressure to maintain flat or slightly lower pricing.

Third, extremely slow recovery in global end-demand: Prolonged high interest rates have left manufacturers struggling to deplete inventory. While AI-related construction and public infrastructure projects offer some support, overall order momentum remains weak.

Does this mean CSC is hopeless? Ashun says no—but investors should monitor three key signals before entering:

First, whether Chinese steel mills genuinely implement production cuts, allowing global steel prices to bottom out.

Second, whether CSC’s pricing in the traditional Q4 peak season—'Golden September, Silver October'—can truly stabilize and begin to rise.

Third, whether institutional investor positioning shifts positive.

Ashun emphasizes that without a catalyst for earnings improvement, 'cheap' can become even cheaper. The spring swallow is still on its way—don’t rush to build its nest just yet.

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