Report Industry Investment Rating No information provided in the content. Core Views of the Report - The IMF has lowered the global economic growth rate forecast for 2025 to 2.8%, and trade policy uncertainty will disrupt the global supply chain. The Fed may be cautious about the timing of interest rate cuts, while the ECB may end the easing cycle. China will continue to implement an expansionary fiscal policy and a moderately loose monetary policy in the second half of the year [4]. - In terms of supply, the global copper concentrate supply growth rate is expected to be only 1.7% in 2025 and further decline to 1.4% in 2026. The global refined copper supply growth rate will drop to 2% in 2025. In the second half of the year, domestic small and medium - sized smelters may face production cut risks, and the release of new global refined copper production capacity will be significantly limited [4]. - In terms of demand, copper has become a key strategic reserve resource in the context of global AI and electrification transformation. The global refined copper consumption growth rate is expected to be 3.7% in 2025, and the domestic growth rate will be 3.4% [4]. - The copper price center is expected to continue to rise in the second half of this year, with the risk of periodic high - level corrections due to overseas macro disturbances. The medium - to - long - term upward trend of copper prices remains unchanged. The main operating range of SHFE copper is expected to be 77,000 - 85,000 yuan/ton, and that of LME copper is 9,500 - 10,500 US dollars/ton [4]. Summary According to the Table of Contents 1. Review of the First - Half Market in 2025 - In the first half of 2025, copper prices showed a trend of bottoming out and rebounding. In the first quarter, SHFE copper rose from a low of 73,000 to 83,000 due to supply concerns and macro - economic factors. In the second quarter, prices fluctuated due to trade policy uncertainties, and then rebounded after the Sino - US trade negotiation [11]. - Domestic copper inventory first increased and then decreased. The spot premium changed from discount to premium. In the second half of the year, domestic refined copper spot premium is expected to remain in the premium range, with the center of premium moving up [13]. 2. Macroeconomic Analysis 2.1 Global Trade Situation Eases, and the US Economy Faces Stagflation Risks - The IMF has lowered the economic growth forecasts of major economies in 2025. The Sino - US trade negotiation has reached a preliminary consensus, but the tariff measures after the 90 - day suspension period are uncertain. The US economy has the risk of stagflation, while the eurozone economy shows a weak recovery [15][16]. 2.2 The Fed's Interest Rate Cut Expectations Rise, and the ECB May Slow Down the Rate - Cutting Pace - The Fed may have 1 - 2 small interest rate cuts this year, possibly starting in September. The ECB cut interest rates in June. The future monetary policies of both central banks will be affected by trade policies and economic data [17][19]. 2.3 Strengthen the Domestic Circulation System, and the Central Bank's Monetary Policy Remains Moderately Loose - China's economy faced challenges in the first half of the year. The central bank implemented a series of measures to support the economy. China's economy showed resilience in the first half, and the economic structure is expected to continue to optimize in the second half [21][22]. 3. Copper Ore Supply Analysis 3.1 The Global Concentrate Shortage Exceeds Expectations, and Chinese Enterprises Actively Explore Copper Ore Resources - In the first half of 2025, both Chinese and foreign capital accelerated the development of copper resources. However, the output of major mines was affected by various factors, and the shortage of copper concentrates is expected to exceed market expectations in 2025 - 2026 [25][27]. 3.2 The Global Copper Concentrate Growth Rate in 2025 is Expected to Drop to 1.7% - The planned global copper ore supply increment in 2025 is 115.5 million tons, but the actual increment is expected to be 70 - 80 million tons, with a growth rate dropping to 3%. Considering major interference factors, the actual supply growth rate in 2025 is expected to be only 1.7% and further decline in 2026 [31][33]. 4. Refined Copper Supply Analysis 4.1 Domestic Refined Copper Production Will Slow Down in the Second Half of the Year, and the Annual Year - on - Year Growth Rate May Drop to 4.5% - In the first half of 2025, domestic refined copper output was high, but more than 30% of smelters cut production to some extent. The actual output increment may be significantly lower than expected, and the annual growth rate is expected to slow down to 4.5% [41][43]. 4.2 The Release of Overseas Refined Copper Production in 2025 is Very Slow - Overseas new refined copper smelting capacity in 2025 is only 62 million tons, and the actual output is quite limited. The actual increment is expected to be about 15 million tons [45][46]. 4.3 Refined Copper Imports Will Remain at a Low Level in the Second Half of the Year, and Copper Has Become a Strategic Resource in the Great - Power Game - From January to May 2025, China's refined copper imports decreased year - on - year. In the second half of the year, imports are expected to remain at 25 - 28 million tons per month, and the annual imports will drop significantly compared with last year [48][49]. 4.4 Domestic Scrap Copper Supply is Generally Stable, and Southeast Asia May Fill the Gap in US Scrap Copper Imports - From January to May 2025, China's scrap copper imports decreased slightly year - on - year. The supply of scrap copper is expected to remain stable in the second half of the year, with Southeast Asian imports filling the gap left by the US [66][69]. 4.5 LME Inventories Plummeted by More Than 70% in the First Half of the Year, and the Tight - Balance Reality Has Lowered the Global Inventory Center - As of June 27, global visible inventories decreased significantly. LME inventories are at a low level with a risk of squeezing, while COMEX inventories are rising. Domestic inventories are expected to remain low in the second half of the year [73][75]. 5. Refined Copper Demand Analysis 5.1 This Year's Grid Investment Scale is Expected to Exceed 800 Billion, and the New UHV Grid System is Upgrading at an Accelerated Pace - The planned grid investment in 2025 is expected to reach 825 billion, with an increase of 220 billion compared with 2024. The copper consumption growth rate in grid investment is expected to be 3 - 4% [77]. 5.2 The Real Estate Market is Bottoming Out, and the Real Estate Regulation Policies are Intensifying - The real estate market showed a decline in the first five months of 2025, but the price decline margin narrowed. The market is expected to gradually recover in the second half of the year, with a slight decline in copper consumption growth rate [78][80]. 5.3 The "Two New" Policies Drive the Accelerated Production and Sales of Air - Conditioners - From January to May 2025, air - conditioner production and sales increased year - on - year. However, due to various factors, the production scale may be adjusted in the third quarter, and the export may decline [81][82].

Group 1 - The Hang Seng Index closed up 0.62%, while the Hang Seng Tech Index fell by 0.64% [1] - The total market turnover reached 240.225 billion HKD [1] - Steel sector stocks saw significant gains, with Chongqing Steel (01053.HK) rising over 90%, Ansteel (00347.HK) up over 12%, and China Oriental Group (00581.HK) increasing over 11% [1] Group 2 - Technology stocks generally declined, with Kingsoft (03888.HK) down 9.66%, Li Auto (02015.HK) and Hua Hong Semiconductor (01347.HK) both falling over 3% [1] - Major tech companies like Tencent (00700.HK), NetEase (09999.HK), and Kuaishou (01024.HK) also closed in the red [1]

Market Overview - The Hang Seng Index closed up by 0.62% [1] - The Hang Seng Tech Index closed down by 0.64% [1] Steel Sector Performance - The steel sector saw significant gains in the afternoon session [1] - Chongqing Steel (01053.HK) surged over 90% [1] - Ansteel (00347.HK) and China Oriental Group (00581.HK) both rose over 10% [1]

Individual Company News - Li Auto (02015.HK) reported a total revenue of 25.9 billion yuan for Q1 2025, representing a year-on-year increase of 1.1%. Adjusted net profit was 1 billion yuan, down 20.5% year-on-year [1] - Sihuan Pharmaceutical (01093.HK) is in discussions with potential partners regarding licensing and collaboration in drug development, production, and commercialization [1] - SANY International (00631.HK) achieved a net profit of 636 million yuan in Q1, a year-on-year increase of 30.6%, driven by significant revenue growth in large port machinery, oil and gas equipment, silicon energy products, and overseas mining vehicle sales [1] - Minxin Group (00222.HK) has jointly established a partnership to invest in a national-level specialized and innovative technology enterprise [1] - China Orient Group (00581.HK) reported an operating profit of approximately 199 million yuan for Q1 after deducting financial costs [1] Pharmaceutical Sector News - Jiahe Biotech (06998.HK) received approval from the Chinese National Medical Products Administration for the market launch of the new drug GB491 [2] - Fosun Pharma (02196.HK) had its registration application for the drug Luwomeitini approved by the National Medical Products Administration [2] - Yum China (09987.HK) entered into a share repurchase agreement for a total buyback amount of approximately 510 million USD for the second half of the year [2]

Group 1 - The core viewpoint indicates that the steel industry is showing signs of improvement, with the PMI rising to 50.6% in April 2025, marking a 4.6 percentage point increase and entering the expansion zone for the first time in five months [1] - The steel supply and demand have both increased, with faster consumption of steel mill inventories, although steel prices are experiencing fluctuations and raw material prices are continuing to decline [1] - It is anticipated that steel market demand will continue to recover in May, with ongoing production increases in steel mills and a low rebound in raw material and steel prices [1] Group 2 - In the first quarter, the overall steel production remained stable, with crude steel output at 259 million tons (up 0.6% year-on-year), pig iron output at 216 million tons (up 0.8% year-on-year), and steel product output at 359 million tons (up 6.1% year-on-year) [1] - CITIC Securities predicts that 2025 will be a turning point for the Chinese steel industry, with the first quarter expected to mark a long-term performance inflection point [1] - The ongoing industry reforms are expected to lead to a necessary reduction in capacity and output, with the supply side likely to experience an unexpected contraction in production [1] Group 3 - The current phase of low valuations and ongoing profit redistribution in the steel industry is considered a golden allocation period [2] - Related companies in the Hong Kong stock market include Angang Steel (00347), Maanshan Iron & Steel (00323), Chongqing Iron & Steel (01053), and China Oriental Group (00581) [3]

Financial Performance - Revenue decreased from RMB 48,620 million in 2022 to RMB 46,260 million in 2023, and is projected to decline further to RMB 42,957 million in 2024, representing a year-over-year decrease of 4.7% in 2023 and 2.8% in 2024[6]. - Profit attributable to owners of the Company fell from RMB 808 million in 2022 to a loss of RMB 160 million in 2023, with a projected recovery to RMB 149 million in 2024[6]. - EBITDA decreased from RMB 2,357 million in 2022 to RMB 1,279 million in 2023, with an expected increase to RMB 1,500 million in 2024[6]. - The adjusted profit for the year (a non-HKFRS measure) dropped from RMB 513 million in 2022 to RMB 4 million in 2023, with an expected recovery to RMB 266 million in 2024[6]. - The Company reported a loss before income tax of RMB 315 million in 2023, compared to a profit of RMB 756 million in 2022, with a projected profit of RMB 228 million in 2024[6]. - The overall gross profit increased by approximately 147.1% to approximately RMB 1.77 billion, marking a significant turnaround from a net loss to a net profit[48]. - The net profit for 2024 was approximately RMB 225 million, an increase of approximately 214.5% compared to the net loss of approximately RMB 196 million in 2023[48]. - The consolidated gross profit for 2024 was RMB 1,027 million, an increase of approximately 165.4% compared to RMB 387 million in 2023[117]. - The gross profit per tonne of steel products increased from RMB 50 in 2023 to RMB 143 in 2024, reflecting an increase of 186.0%[120]. Sales and Production - The average selling price per tonne of self-manufactured steel products decreased from RMB 3,974 in 2022 to RMB 3,557 in 2023, and is projected to decline further to RMB 3,432 in 2024[18]. - Total sales volume of self-manufactured steel products increased from 7,102,000 tonnes in 2022 to 7,733,000 tonnes in 2023, but is expected to decrease to 7,169,000 tonnes in 2024[13]. - H-section steel products accounted for 46.1% of total sales volume in 2024, with a sales volume of 3,302,000 tonnes, down 8.3% from 3,600,000 tonnes in 2023[109]. - Strips and strip products represented 40.5% of total sales volume in 2024, with a sales volume of 2,900,000 tonnes, down 3.8% from 3,014,000 tonnes in 2023[109]. - The total sales volume for 2024 was 7,169,000 tonnes, a decrease of approximately 7.3% from 2023's 7,733,000 tonnes[107]. - The Group's annual production output capability of steel products was more than 10 million tonnes in 2024[110]. Market and Industry Trends - In 2024, the total profit of the iron and steel industry in China was approximately RMB 29.19 billion, representing a year-on-year decrease of approximately 54.6%[40]. - The national production volume of pig iron, crude steel, and steel products in 2024 was approximately 852 million tonnes, 1.005 billion tonnes, and 1.400 billion tonnes respectively, with decreases of approximately 2.3% and 1.7% for pig iron and crude steel, while steel products saw an increase of approximately 1.1% compared to 2023[40]. - The global economy is expected to continue a slow recovery in 2025, benefiting from declining inflation and easing monetary policies, but faces challenges such as trade protectionism and geopolitical tensions[79]. - The iron and steel industry anticipates improved downstream demand and rising product prices, with no significant decline in annual steel consumption expected in 2025[80]. Strategic Initiatives - The Company plans to focus on improving operational efficiency and exploring new market opportunities to enhance profitability in the upcoming years[6]. - The Group aims to enter the Fortune Global 500, focusing on specialization, industry chain extension, and high-tech development[33]. - The Group aims to enhance core competitiveness through digitalization, lean management, and the development of high-value-added products, with several green and low-carbon factory projects expected to launch in 2025[83]. - The Group plans to diversify its business by expanding into trading steel products, precast components, and recycling solid waste residues[88]. - The Group is committed to achieving carbon neutrality by 2050, investing in emission-reduction technologies and environmental protection projects[92]. Environmental and Sustainability Efforts - Jinxi Limited achieved an annual emission reduction of approximately 1.10 million tonnes of carbon dioxide, 53 tonnes of nitrogen oxide, and 26 tonnes of sulfur dioxide in 2024[45]. - The self-generated electricity rate for Jinxi Limited increased to approximately 52.4%, while externally purchased electricity was reduced by approximately 260 million kWh per year[45]. - Policies in the iron and steel industry are focusing on energy efficiency improvement, green and low-carbon transformation, and achieving carbon peak by 2027[43]. - Jinxi Limited was rated as a "Grade A in Environmental Protection Performance Rating" enterprise, being the second enterprise in Tangshan City to achieve this[60]. - The Group has implemented various green energy projects, resulting in a reduction of approximately 1.1 million tonnes of CO2 emissions annually[61]. Financial Position and Investments - As of December 31, 2024, the Group had unutilized banking facilities of approximately RMB 14.5 billion, an increase from RMB 13.9 billion in 2023[136][138]. - The current ratio of the Group was 1.3 times as of December 31, 2024, compared to 1.2 times in 2023, while the gearing ratio was 50.2%, slightly up from 50.1% in 2023[139][144]. - Cash and cash equivalents amounted to approximately RMB 3,516 million as of December 31, 2024, down from RMB 3,618 million in 2023[140][144]. - The debt-to-capital ratio of the Group increased to 65.8% in 2024 from 63.0% in 2023[142][145]. - The Group reported investment gains from steel products, iron ore, and related raw materials derivative financial instruments of approximately RMB22 million for the year ended 31 December 2024, compared to losses of approximately RMB40 million in 2023[156][159]. Dividends and Shareholder Returns - The Group proposed a final dividend of HK$0.01 per ordinary share and a special dividend of HK$0.05 per ordinary share for 2024[75]. - The Group aims to assess the possibility of increasing dividend distribution to reward shareholders for their support[96]. - The Board proposed a final dividend of approximately HK$37 million (approximately RMB34 million) and a special dividend of approximately HK$186 million (approximately RMB172 million) for the year ended 31 December 2024[157][160].

钢铁股集体重挫，截至发稿，马鞍山钢铁股份(00323)跌19.44%，报1.45港元；鞍钢股份（000898） (00347)跌17.96%，报1.37港元；中国东方集团(00581)跌17.19%，报1.06港元；重庆钢铁（601005）股份 (01053)跌16.09%，报0.73港元。 民生证券指出，贸易摩擦担忧升级，钢材价格承压。4月2日，特朗普宣布对贸易伙伴征收所谓的"对等 关税"措施，4月9日将实施34%所谓的"对等关税"。钢铁产品不受本次关税约束，但其下游制成品将受 到关税影响。根据钢联测算，2024年钢铁间接对美出口约1000万吨，其他国家对美出口的钢材也有部分 来自于中国，整体影响量预计不低于2000万吨，约占总需求的2%。长期来看，粗钢仍有产量调控预 期，原料端铁矿、焦煤供给趋于宽松，若限产幅度超过2000万吨，钢企盈利能力有望修复。 信达证券（601059）表示，虽然钢铁行业现阶段面临供需矛盾突出等困扰，行业利润整体下行，但伴随 系列"稳增长"政策纵深推进，钢铁需求总量有望在房地产筑底企稳、基建投资稳中有增、制造业持续发 展、钢铁出口高位等支撑下保持平稳或甚至边际略增，反观平控政策预期下 ...

Financial Performance - Total revenue for the year ended December 31, 2024, was RMB 42.96 billion, a decrease of 7.4% from RMB 46.26 billion in 2023[5] - Gross profit increased significantly to RMB 1.77 billion, up 147.1% from RMB 717.29 million in the previous year[5] - EBITDA for 2024 was RMB 1.50 billion, representing a 17.3% increase from RMB 1.28 billion in 2023[4] - The company reported a net profit of RMB 224.62 million, a turnaround from a net loss of RMB 196.21 million in 2023, marking a 214.5% improvement[7] - Basic earnings per share improved to RMB 0.04 from a loss of RMB 0.04 in 2023, reflecting a significant recovery in profitability[4] - The company achieved a revenue of approximately RMB 43 billion in 2024, a decrease of about 7.1% compared to the previous year, while gross profit increased by approximately 147.1% to about RMB 1.77 billion[79] - The net profit for the year 2024 was approximately RMB 225 million, marking a substantial increase of about 214.5% compared to a net loss of RMB 196 million in 2023[79] - The company’s EBITDA rose from approximately RMB 1.28 billion in 2023 to about RMB 1.50 billion in 2024, indicating improved operational efficiency[79] Revenue Breakdown - The sales volume of self-produced steel products decreased by 7.3% to 7.17 million tons, while trading of steel products fell by 45.0% to 110,000 tons[3] - Total sales for the year ended December 31, 2024, amounted to RMB 42,957,307 thousand, a decrease of 7.5% compared to RMB 46,259,738 thousand for the year ended December 31, 2023[20][26] - The sales of H-beam products decreased from RMB 12,946,577 thousand in 2023 to RMB 11,737,216 thousand in 2024, representing a decline of 9.3%[20] - The sales of iron ore decreased from RMB 11,361,275 thousand in 2023 to RMB 9,934,620 thousand in 2024, a decline of 11.8%[20] - The steel segment reported a revenue of RMB 42,860,478 thousand for the year ended December 31, 2024, compared to RMB 46,013,691 thousand in 2023, reflecting a decrease of 6.5%[23][26] - The real estate segment recorded a revenue of RMB 96,829 thousand for the year ended December 31, 2024, down from RMB 246,047 thousand in 2023, a decline of 60.7%[23][26] Asset and Liability Management - The company’s total assets as of December 31, 2024, were RMB 50.08 billion, a slight increase of 0.1% from RMB 50.03 billion in 2023[4] - Total assets increased slightly to RMB 50,076,936 thousand in 2024 from RMB 50,030,172 thousand in 2023, representing a growth of 0.09%[8] - Total liabilities increased to RMB 25,121,663 thousand in 2024 from RMB 25,052,387 thousand in 2023, reflecting a rise of 0.28%[9] - The debt-to-capital ratio increased to 65.8% from 63.0% in the previous year, indicating a higher leverage position[4] - The company's borrowings increased to RMB 13,593,786 thousand in 2024 from RMB 13,089,962 thousand in 2023, an increase of 3.85%[9] - The total borrowings as of December 31, 2024, amount to RMB 16,388,169 thousand, an increase from RMB 15,473,895 thousand in 2023, representing a growth of approximately 6%[69] Cash Flow and Investments - The company's cash and cash equivalents decreased to RMB 3,516,253 thousand in 2024 from RMB 3,618,030 thousand in 2023, a decline of 2.82%[8] - The company confirmed receivables from local government departments amounting to approximately RMB 1.528 billion related to lease land and land use rights[52] - The company has secured approximately RMB 10.15 billion in collateralized bank loans as of December 31, 2024, compared to RMB 5.17 billion in 2023, indicating a significant increase of about 96%[69] - The company has RMB 460,931 thousand in structured bank deposits as of December 31, 2024, compared to RMB 127,543 thousand in 2023, reflecting a growth of approximately 262%[68] Operational Efficiency and Cost Management - The average selling price of steel products decreased during the year due to continued low demand in downstream markets[79] - The cost of raw materials and sold goods decreased to RMB 36,891,701 thousand in 2024 from RMB 39,914,996 thousand in 2023, indicating a decline of about 7.58%[31] - Employee benefit expenses increased to RMB 1,464,443 thousand in 2024 from RMB 1,354,273 thousand in 2023, representing a rise of approximately 8.14%[31] - The company plans to enhance its operational strategies focusing on cost reduction, efficiency improvement, and procurement optimization to navigate macroeconomic challenges[79] Dividends and Shareholder Returns - The company declared a final dividend of HKD 0.01 per share and a special dividend of HKD 0.05 per share, with a total annual dividend of HKD 0.06, up 20.0% from HKD 0.05 in 2023[4] - The company plans to distribute a final dividend of approximately HKD 37 million (about RMB 34 million) and a special dividend of approximately HKD 186 million (about RMB 172 million) for the year ending December 31, 2024, pending shareholder approval[48] Environmental Initiatives - The company’s subsidiary, Jinxin Steel, achieved a reduction in carbon dioxide emissions by approximately 1.1 million tons in 2024, contributing to its green energy initiatives[78] - The company reduced carbon dioxide emissions by approximately 1.1 million tons and nitrogen oxides by 53 tons annually through various green initiatives[83] - The company plans to complete multiple projects to create green low-carbon factories by 2024 and initiate new energy soft magnetic materials projects by 2025[90] Future Outlook - The company expects a gradual improvement in the steel industry environment in 2025, driven by a recovery in downstream demand and stable infrastructure investment growth[89] - The company will focus on high-end, differentiated products and extend its industrial chain into new materials and high-end equipment manufacturing[93]

Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 22,565 million, a slight increase of 2.3% compared to RMB 22,059 million in the same period of 2023[5]. - Gross profit for the same period was RMB 900 million, up from RMB 719 million in 2023, reflecting a gross margin improvement[5]. - Profit for the period attributable to owners of the Company was RMB 94 million, a significant decrease of 66.7% from RMB 282 million in 2023[5]. - Basic earnings per share for the six months ended June 30, 2024, was RMB 0.03, down from RMB 0.08 in 2023[5]. - The Group recorded a revenue of approximately RMB 22.57 billion for the six months ended June 30, 2024, representing an increase of approximately 2.3% compared to the same period last year[40]. - The overall gross profit increased by approximately 14.4% to approximately RMB 6.43 billion for the same period[40]. - The interim net profit was approximately RMB 123 million, a decrease of approximately 55.4% compared to RMB 276 million for the corresponding period last year[41]. - The Group's EBITDA for the period decreased from approximately RMB 1.05 billion to approximately RMB 815 million[41]. - For the six months ended June 30, 2024, the profit for the period was approximately RMB 123,029,000, a decrease of 55.5% compared to RMB 276,135,000 for the same period in 2023[102]. - The adjusted profit for the period was RMB 123,029,000, down 43.7% from RMB 218,430,000 in the previous year[102]. Sales and Production - Average selling price per tonne of self-manufactured steel products decreased to RMB 3,505 in 2024 from RMB 3,599 in 2023, indicating a decline of 2.6%[12]. - Total sales volume of self-manufactured steel products for the six months ended June 30, 2024, was 3,762,000 tonnes, a decrease of 3.1% compared to 3,881,000 tonnes in 2023[18]. - The sales volume of H-section steel products decreased to 1,614,000 tonnes in 2024 from 1,945,000 tonnes in 2023, a decline of 17.0%[18]. - In the first half of 2024, the Group's total sales volume of self-manufactured steel products was approximately 3.76 million tonnes, a decrease of approximately 3.1% compared to 3.88 million tonnes in the corresponding period of 2023[63][64]. - The sales of H-section steel products amounted to approximately 1.61 million tonnes, accounting for 42.9% of total sales volume, which represents a decrease of 17.0% compared to the previous year[66]. Market Conditions - The overall business environment of China's iron and steel industry in the first half of 2024 improved compared to the second half of 2023, but still maintained a pattern of "strong supply, weak demand, low prices, and high costs"[32]. - The demand for steel used in engineering machinery decreased due to the drag from the real estate sector, contributing to the overall weakness in downstream demand for steel products[31]. - The outlook for the iron and steel industry indicates that downstream demand will remain low, but infrastructure investment growth is expected to rebound in the second half of 2024[83]. - The overall business environment for the iron and steel industry is expected to face uncertainties in the second half of 2024, but the development trend is anticipated to gradually improve[83]. Strategic Initiatives - The Group aims to adopt a "specialisation, industry chain extension, high-tech and high-end" strategy for transformation and upgrading, focusing on innovation-driven high-quality development[31]. - The Group plans to enhance its core competitiveness by improving efficiency, reducing costs, and increasing the proportion of high value-added products[84]. - The Group will continue to promote the development of various steel products, including H-section steel and marine steel, while expanding its trading business in steel products and raw materials[84]. - The Group is exploring technology solutions for carbon reduction and investing in equipment upgrades to achieve better cost efficiency and reduce emissions[89]. - The Group aims to enhance energy efficiency and low-carbon transformation capabilities in the iron and steel industry, with policies focusing on energy efficiency improvement and carbon peaking[39]. Financial Position - The Company reported a net asset value of RMB 24,933 million as of June 30, 2024, a slight decrease from RMB 24,978 million as of December 31, 2023[9]. - Total assets increased to RMB 52,215 million as of June 30, 2024, up from RMB 50,030 million as of December 31, 2023[9]. - The Group's financial position remains sound, and it will strive to make effective use of its resources for future growth[31]. - As of June 30, 2024, the Group had unutilised banking facilities of approximately RMB 15.1 billion, an increase from RMB 13.9 billion as of December 31, 2023[104]. - The current ratio as of June 30, 2024 was approximately 1.4 times, up from 1.2 times as of December 31, 2023[109]. - The cash and cash equivalents of the Group amounted to approximately RMB 5,347 million as of June 30, 2024, compared to RMB 3,618 million as of December 31, 2023[110]. - The debt-to-capital ratio as of June 30, 2024 was approximately 71.0%, an increase from 63.0% as of December 31, 2023[112]. - Consolidated interest expenses for the six months ended June 30, 2024 were approximately RMB 280 million, compared to RMB 241 million for the same period in 2023[113]. Investment and Dividends - The Group did not recommend the distribution of an interim dividend for 2024 due to current challenges in the iron and steel industry[44]. - The Group will evaluate the possibility of increasing dividend distributions to reward shareholders under appropriate circumstances[90]. - The Board proposed a special dividend of approximately HK$ 186 million (equivalent to approximately RMB 170 million) for the year ended December 31, 2023, which was approved by shareholders[127]. - The Group's strategy includes specialization, industry chain extension, and high-tech development to drive transformation and upgrading[93]. Real Estate and Construction - The Group recorded revenue and operating profit from its real estate business of approximately RMB 23 million and RMB 4 million, respectively, in the first half of 2024[58][61]. - A provision of approximately RMB 201 million was made for impairment of properties under development and held for sale related to the real estate industry in second-and-lower-tier cities in the PRC for the financial year ended December 31, 2023[97]. - The Group expects the real estate market in the PRC to gradually stabilize due to various market stabilization measures introduced by the government[98]. - The Group has a project under construction with a gross floor area of approximately 248,000 m², expected to be completed in 2029[81]. Environmental and Regulatory Compliance - The NDRC and other ministries issued a "Special Action Plan for Energy Conservation and Carbon Reduction in the Iron and Steel Industry" in May 2024, aiming to regulate crude steel production and reduce energy consumption intensity[34]. - By the end of 2025, the target is to increase the proportion of electric arc furnace steel production to 15% of total crude steel production and achieve 30% of production at or above benchmark energy efficiency levels[34]. - The Group will actively explore new models and paths that align with green development concepts to promote sustainable development[31]. - The Group is committed to green, low-carbon, and sustainable development through effective capital and asset allocation[95].

[Supplemental Announcement Regarding 2023 Annual Report](index=1&type=section&id=Supplemental%20Announcement%20Regarding%202023%20Annual%20Report) [Announcement Overview](index=1&type=section&id=Announcement%20Overview) This announcement supplements the 2023 annual report, providing additional details on the 2013 Share Option Scheme without affecting other report contents - This announcement aims to supplement information regarding the Share Option Scheme in the 2023 annual report[1](index=1&type=chunk) [Supplemental Details of Share Option Scheme](index=1&type=section&id=Supplemental%20Details%20of%20Share%20Option%20Scheme) The announcement details key quantitative metrics and terms of the 2013 Share Option Scheme, including shares available and acceptance price Share Option Scheme Key Metrics | Metric | Value/Term | | :--- | :--- | | **Issuable Share Scale (as % of 2023 FY weighted average shares)** | Approximately 0.56% | | **Total Shares Available for Issuance as of Annual Report Date** | 21,000,000 shares | | **Percentage of Issuable Shares (as % of Issued Shares) as of Annual Report Date** | Approximately 0.56% | | **Offer Acceptance Period** | 14 days | | **Acceptance Consideration** | HKD 1.00 | [Remuneration Committee's Review and Rationale](index=2&type=section&id=Remuneration%20Committee%20Review%20and%20Approval%20of%20Share%20Options%20Granted%20Under%202013%20Scheme%20in%20FY2023) The Remuneration Committee approved share options under the 2013 scheme in FY2023, without performance targets, citing alignment with future share price and individual performance - The Remuneration Committee confirmed that all share options granted to directors and employees under the 2013 Share Option Scheme in FY2023 **did not include performance targets**[2](index=2&type=chunk) - The Committee provided reasons for not setting performance targets: - **Interest Alignment**: Share options are time-vested, directly linking their value to future share price performance, aligning grantees' interests with the Group's - **Contribution Incentive**: Granting options to directors and employees encourages their continuous efforts for the Group's development - **Individualized Consideration**: The number of options granted was determined based on grantees' past performance and potential future contributions[2](index=2&type=chunk)