Group 1: Key Recommendations - The report recommends increasing holdings in the food and beverage sector, particularly in liquor and consumer goods, as the market shows signs of rationality and recovery [2][34] - Dragon Source Power is highlighted for its high wind power installation ratio, benefiting from improved wind conditions and long-term profitability potential through asset upgrades [6][7] - The electronics sector is expected to see significant growth due to the rising demand for AI testing machines, driven by the increase in GPU and HBM chip production [9][10] - The steel industry, particularly CITIC Special Steel, is noted for its performance in adjusting product structure and maintaining profitability despite industry challenges [12][13] - The construction sector is projected to experience a 7.3% year-on-year increase in infrastructure funding in 2025, with recommendations for undervalued high-dividend state-owned enterprises [16][17] - Zijin Mining is expected to achieve record high performance due to rising gold and copper prices, with significant production increases anticipated in 2025-2026 [20][23] Group 2: Industry Insights - The food and beverage industry is experiencing a rational phase, with a notable decrease in participation at trade fairs, indicating a shift towards more stable market conditions [4][34] - In the liquor segment, post-holiday sales have remained stable, with major brands maintaining price stability, suggesting a potential for steady growth in Q1 2025 [4][35] - Consumer goods are showing signs of recovery, with improvements in beer and soft drink sales, particularly in the packaging water segment [5][34] - The wind power sector is poised for short-term profitability improvements due to favorable wind conditions and ongoing upgrades to older wind farms [6][7] - The electronics testing machine market is expected to grow significantly, with domestic manufacturers poised to benefit from the AI infrastructure boom [9][10] - The construction industry is set to benefit from increased funding and a more proactive fiscal policy, leading to a positive outlook for infrastructure projects [16][17]

Investment Rating - The report maintains a "Buy" rating for the company, indicating a strong performance relative to the market [7]. Core Insights - The company's 2024 annual report shows that revenue reached 109.203 billion yuan, a year-on-year decrease of 4.22%, while net profit attributable to shareholders was 5.126 billion yuan, down 10.41% year-on-year. However, the fourth quarter net profit was 1.29 billion yuan, reflecting a 16.09% increase from the previous quarter [7]. - The company's special steel business remains stable, with a production volume of 20.16 million tons, a year-on-year increase of 1.53%. The average selling price of special steel products was 5,117 yuan per ton, down 5.02% year-on-year [7]. - High-end product sales continue to grow, with 738,000 tons of "small giant" project steel sold, achieving 103% of the annual target and a year-on-year increase of 10% [7]. - The company has maintained a high level of R&D investment, with R&D expenses increasing by 3.39% to 4.602 billion yuan [7]. - The report forecasts net profits of 5.463 billion yuan for 2025 and 5.993 billion yuan for 2026, with a new estimate of 6.286 billion yuan for 2027, corresponding to price-to-earnings ratios of 12, 11, and 10 for 2025-2027 respectively [7]. Financial Data and Profit Forecast - Total revenue (million yuan): 114,019 in 2023, 109,203 in 2024, projected 107,648 in 2025, 108,832 in 2026, and 109,051 in 2027 [2][9]. - Net profit (million yuan): 5,721 in 2023, 5,126 in 2024, projected 5,463 in 2025, 5,993 in 2026, and 6,286 in 2027 [2][9]. - Earnings per share (yuan/share): 1.13 in 2023, 1.02 in 2024, projected 1.08 in 2025, 1.19 in 2026, and 1.25 in 2027 [2][9]. - Gross margin (%): 13.1 in 2023, 12.8 in 2024, projected 13.4 in 2025, 13.5 in 2026, and 13.7 in 2027 [2][9].

Core Viewpoint - The company experienced a decline in revenue and net profit in 2024, with a focus on adjusting product structure and expanding international presence to capture growth opportunities in specific sectors [2][6]. Financial Performance - In 2024, the company achieved operating revenue of 109.20 billion, a year-on-year decrease of 4.22%, and a net profit attributable to shareholders of 5.13 billion, down 10.41% year-on-year [2]. - In Q4 2024, the company reported operating revenue of 25.70 billion, a year-on-year decline of 6.90% and a quarter-on-quarter decrease of 3.02%, with a net profit of 1.29 billion, down 4.26% year-on-year but up 16.09% quarter-on-quarter [2]. Steel Sales and Profitability - Steel sales in 2024 remained flat at 18.89 million tons, with an average selling price of 5,781 per ton, down 4.22% year-on-year, and a gross profit per ton of 743, down 6.35% year-on-year [3]. - In the second half of 2024, steel sales were 9.37 million tons, with a price of 5,568 per ton, down 5.34% year-on-year, and a gross profit per ton of 748, showing a slight increase of 0.72% year-on-year [3]. Product Structure Adjustment - The company actively adjusted its product structure in 2024, achieving record high sales in energy steel, with sales distribution as follows: automotive (28%), energy (34%), machinery (19%), bearings (10%), high-end special materials (2%), and others (7%) [4]. - Sales of bearing steel increased by 6% year-on-year, and sales of steel for new energy vehicles grew by 29% [4]. Strategic Projects - The company reported a 23% year-on-year increase in sales of "two high and one special" products, with 738,000 tons sold from 81 "small giant" projects, exceeding the annual plan by 3% [5]. International Expansion - In 2024, the company focused on overseas expansion, conducting in-depth investigations of over 20 steel projects in Southeast Asia, the Middle East, Mexico, and Europe, as well as resource projects in South America and Australia [6]. - The company established an international strategy of "resource + main business + distribution" and prioritized mergers and acquisitions for its expansion efforts [6].

Group 1: Company Performance and Strategy - The company reported a significant focus on optimizing product structure and capacity layout in response to market demand and policy changes [3][4][5]. - In 2024, the company exported 42,000 tons to the U.S., representing a low percentage of total exports, indicating minimal direct impact from U.S. tariff policies [5]. - The company aims to enhance its market position by focusing on high-end steel products, which are supported by government policies [4][5]. Group 2: Market Conditions and Challenges - The steel industry faces challenges due to supply-demand imbalances and potential production cuts of 50 million tons in 2025, which the company is monitoring closely [3][4]. - The company anticipates complex price fluctuations in the commodity market driven by global economic recovery and geopolitical factors [6][7]. - The company is prepared to manage procurement costs and risks associated with raw material price volatility through diversified sourcing strategies [6][7]. Group 3: Investment and Capital Expenditure - The company plans to align capital expenditures with operational needs, focusing on smart manufacturing and green initiatives [9][10]. - In 2024, the company actively explored over 20 steel projects in Southeast Asia, the Middle East, and Europe, laying the groundwork for international expansion [10][11]. - The company emphasizes a cautious approach to overseas investments, prioritizing acquisitions over greenfield projects due to lower costs and higher efficiency [10][11]. Group 4: Financial Outlook and Profitability - The company expects improved gross margins in Q4 2024, driven by raw material price management and a shift towards high-end product offerings [12][13]. - Interest expenses are projected to double from 2022 to 2024 due to the consolidation of Tianjin Steel and changes in capitalized projects [10][11]. - The company maintains a steady dividend policy, balancing shareholder returns with business growth [10][11]. Group 5: Industry Trends and Future Prospects - The demand for special steel products is expected to grow, particularly in high-end manufacturing sectors such as automotive and aerospace [8][9]. - The company is strategically positioned to capitalize on the increasing demand for advanced materials in robotics and renewable energy sectors [8][9]. - The company is committed to enhancing its competitive edge through R&D in high-tech materials and maintaining strong relationships with key clients [12][13].

Investment Rating - The report maintains a "Recommended" rating for the company [4][6]. Core Insights - In 2024, the company achieved revenue of 109.20 billion yuan, a decrease of 4.22% year-on-year, and a net profit attributable to shareholders of 5.13 billion yuan, down 10.41% year-on-year [1]. - The company is focusing on structural adjustments in product varieties and increasing R&D investments, particularly in high-end products [3][4]. Summary by Sections Financial Performance - In Q4 2024, the company reported revenue of 25.70 billion yuan, a year-on-year decrease of 6.9% and a quarter-on-quarter decrease of 3.02%. The net profit for Q4 was 1.29 billion yuan, down 4.26% year-on-year but up 16.09% quarter-on-quarter [1]. - The company's gross margin for 2024 was 12.85%, a decline of 0.29 percentage points year-on-year, while Q4 gross margin improved to 14.39%, an increase of 2.90 percentage points year-on-year [2]. Sales and Production - The company's steel sales remained stable at 18.89 million tons in 2024, with export sales decreasing by 7.5% to 2.20 million tons. The sales target for 2025 is set at 18.60 million tons, a decrease of 1.5% year-on-year, with export sales expected to increase by 20.3% to 2.65 million tons [2]. R&D and Product Development - The company increased its R&D expenses to 4.60 billion yuan in 2024, representing a 2.07% year-on-year growth, with an R&D expense ratio of 4.21%, up 0.31 percentage points [2]. - The company is focusing on high-end product development, particularly in sectors such as aerospace, robotics, and renewable energy, with significant growth in sales of bearing steel and energy-use steel [3]. Future Outlook - The company anticipates net profits of 5.22 billion yuan, 5.61 billion yuan, and 6.00 billion yuan for 2025, 2026, and 2027, respectively, with corresponding PE ratios of 12x, 11x, and 11x [4][5].

Investment Rating - The report maintains a "Recommended" rating for the company [4][6]. Core Views - The company achieved a revenue of 109.20 billion yuan in 2024, a decrease of 4.22% year-on-year, with a net profit attributable to shareholders of 5.13 billion yuan, down 10.41% year-on-year [1][2]. - The company is focusing on deepening product structure adjustments and increasing R&D investment, particularly in high-end products [3][4]. Summary by Sections Financial Performance - In Q4 2024, the company reported a revenue of 25.70 billion yuan, a year-on-year decrease of 6.9% and a quarter-on-quarter decrease of 3.02% [1]. - The gross profit margin for 2024 was 12.85%, a decline of 0.29 percentage points year-on-year, while Q4 gross profit margin increased to 14.39%, up 2.90 percentage points year-on-year [2]. Sales and Production - The company's steel sales remained stable at 18.89 million tons in 2024, with export sales decreasing by 7.5% to 2.20 million tons [2]. - The sales target for 2025 is set at 18.60 million tons, a decrease of 1.5% year-on-year, with export sales expected to increase by 20.3% to 2.65 million tons [2]. R&D and Product Development - The company increased its R&D expenses to 4.60 billion yuan in 2024, representing a 2.07% year-on-year growth, with an R&D expense ratio of 4.21% [2]. - The company is focusing on high-end products, particularly in sectors such as bearings and new energy vehicles, with significant growth in sales of bearing steel and energy-use steel [3]. Future Outlook - The company anticipates net profits of 5.22 billion yuan, 5.61 billion yuan, and 6.00 billion yuan for 2025, 2026, and 2027 respectively, with corresponding PE ratios of 12x, 11x, and 11x [4][5].

Investment Rating - The report maintains a "Buy" rating for the company [5] Core Views - The company achieved a revenue of 109.20 billion yuan in 2024, a decrease of 4.22% year-on-year, with a net profit of 5.13 billion yuan, down 10.41% year-on-year [1] - The company is actively adjusting its product mix, with energy steel sales reaching a historical high and significant growth in automotive and new energy vehicle steel sales [2][3] - The company is making positive progress in its overseas expansion strategy, focusing on a full industry chain layout internationally [3] Summary by Sections Financial Performance - In 2024, the company reported a revenue of 109.20 billion yuan, a decline of 4.22% from the previous year, and a net profit of 5.13 billion yuan, down 10.41% year-on-year [1] - The fourth quarter revenue was 25.70 billion yuan, a decrease of 6.90% year-on-year, but a net profit of 1.29 billion yuan showed a quarter-on-quarter increase of 16.09% [1] - The average selling price of steel per ton was 5,781 yuan, down 4.22% year-on-year, with a gross profit per ton of 743 yuan, down 6.35% year-on-year [1] Product Mix and Sales - The company has adjusted its product structure, with sales by application in 2024 as follows: automotive (28%), energy (34%), machinery (19%), bearings (10%), high-end special materials (2%), and others (7%) [2] - Sales of bearing steel increased by 6% year-on-year, and energy steel sales reached a historical high [2] - The company’s "two high and one special" product sales grew by 23% year-on-year, with 738 million tons sold [2] Overseas Expansion - The company has been actively planning its overseas layout, focusing on over 20 steel projects in Southeast Asia, the Middle East, Mexico, and Europe, as well as resource projects in South America and Australia [3] - The international strategy emphasizes a "resource + main business + distribution" approach, with a focus on mergers and acquisitions [3] Profit Forecast - Due to a decline in gross profit per ton, the company’s net profit forecasts for 2025 and 2026 have been adjusted downwards to 5.59 billion yuan and 6.24 billion yuan, respectively [3] - A new forecast for 2027 projects a net profit of 6.83 billion yuan, with expectations for improved profitability as the product structure continues to optimize [3]

Investment Rating - The report maintains a "Buy" rating for the company, citing its leading position in the special steel industry and improving capacity integration capabilities [4][6]. Core Views - The company reported a limited decline in performance, with a revenue of CNY 109.2 billion in 2024, down 4.22% year-on-year, and a net profit of CNY 5.126 billion, down 10.41% year-on-year [1][2]. - The company's sales gross margin showed improvement expectations, with quarterly gross margins increasing from 12.31% in Q1 to 14.39% in Q4 of 2024 [2]. - The long-term demand for special steel in downstream industries is expected to grow, supported by favorable manufacturing policies [2]. Financial Performance - In 2024, the company achieved a net profit of CNY 5.126 billion, with a decrease of 10.41% year-on-year, while the non-recurring net profit was CNY 4.975 billion, down 5.48% year-on-year [2]. - The company’s sales volume of steel remained stable at 18.89 million tons in 2024, with an export volume of 2.02 million tons, and a target of 2.65 million tons for 2025, representing a 20.3% increase [3]. - The company’s earnings per share (EPS) for 2024 was CNY 1.02, with projections of CNY 1.08, CNY 1.18, and CNY 1.25 for 2025, 2026, and 2027 respectively [5]. Market Outlook - The report highlights a positive outlook for high-end product sales, with significant growth in automotive and energy steel products, indicating a robust demand in the special steel sector [3]. - The company is expected to benefit from the ongoing upgrades in the manufacturing sector, which will support its profit recovery trend [4].

Investment Rating - The report maintains a "Buy" rating for the company, citing its leading position in the special steel industry and improving production capacity integration [4][6]. Core Views - The company reported a limited decline in performance, with a revenue of 109.2 billion yuan in 2024, down 4.22% year-on-year, and a net profit of 5.126 billion yuan, down 10.41% year-on-year. The basic earnings per share (EPS) was 1.02 yuan, with a proposed dividend of 5.07 yuan per 10 shares [1][2]. - The company's resilience is highlighted as its profit decline is less severe compared to the overall industry, where the average profit drop for major steel enterprises was 50.3% [2]. - The long-term demand for special steel is expected to grow due to favorable manufacturing policies and the maturation of the steel industry, leading to a potential recovery in sales gross margins [2]. Financial Performance Summary - In 2024, the company achieved a net profit of 5.126 billion yuan, a decrease of 10.41% year-on-year, while the non-recurring net profit was 4.975 billion yuan, down 5.48% year-on-year [2]. - The quarterly sales gross margins for 2024 were 12.31%, 12.30%, 12.51%, and 14.39%, with net profit margins of 5.00%, 4.98%, 4.46%, and 5.19% respectively [2]. - The company aims for a steel production target of 18.6 million tons in 2025, with an export volume target of 2.65 million tons, representing a year-on-year growth of 20.3% [3]. Product and Market Outlook - The sales volume of high-end products, such as bearing steel, increased by 6%, and the sales of automotive steel for domestic projects rose by 38% [3]. - The company’s focus on high-end special steel manufacturing is expected to support a trend of profit recovery, with projected net profits of 5.45 billion yuan, 5.97 billion yuan, and 6.30 billion yuan for 2025 to 2027, corresponding to P/E ratios of 11.6, 10.6, and 10.1 respectively [4][5].

KPMG Huazhen LLP 8th Floor, KPMG Tower Oriental Plaza 1 East Chang An Avenue Beijing 100738 China Telephone +86 (10) 8508 5000 Fax +86 (10) 8518 5111 Internet kpmg.com/cn 毕马威华振会计师事务所 (特殊普通合伙) 中国北京 东长安街 1 号 东方广场毕马威大楼 8 层 邮政编码:100738 电话 +86 (10) 8508 5000 传真 +86 (10) 8518 5111 网址 kpmg.com/cn 中信泰富特钢集团股份有限公司 2024 年度内部控制审计报告 内部控制审计报告 毕马威华振审字第 2501431 号 中信泰富特钢集团股份有限公司全体股东： 按照《企业内部控制审计指引》及中国注册会计师执业准则的相关要求，我们审 计了中信泰富特钢集团股份有限公司（以下简称"贵公司"）2024 年 12 月 31 日的财务 报告内部控制的有效性。 一、 企业对内部控制的责任 按照《企业内部控制基本规范》、《企业内部控制应用指引》、《企业内部 ...