We reiterate our MARKET PERFORM rating on CSM as the company continues to struggle with Chinese competition, sluggish volume growth and ASP reduction. Management’s comments suggest more challenging prospects for its semi-steel plant than previously thought, while a recovery in natural rubber prices still looms as a substantial threat to future profitability. CSM’s TTM P/E of 9.2x (20% discount to peers) looks reasonable given its worsening earnings prospects.