Group 1: New Energy Vehicle Steel Production - The company is set to launch a new production line for high-grade non-oriented electrical steel for new energy vehicles, expected to produce 350,000 tons per year by June 2022, significantly enhancing production efficiency [2] - The demand for electrical steel is projected to rise with the anticipated increase in new energy vehicle sales from millions to tens of millions annually, driven by carbon emission policies and vehicle advancements [2] Group 2: Transformer Industry Demand - The demand for oriented electrical steel in the transformer industry is expected to surge, particularly with the increase in high-efficiency transformers as indicated by the national grid's recent bidding results [3] - The "14th Five-Year Plan" and the national "dual carbon" strategy are expected to further elevate the demand for high-end oriented electrical steel [3] Group 3: Company Performance and Strategy - The company has outperformed the industry average in Q3 due to advancements in technology, environmental performance, market opportunities, efficiency improvements, and capital operations [3] - Key factors include maintaining a leading position in technology, achieving A-level environmental performance, and dynamically adjusting production lines to enhance profitability [3] Group 4: Certification and Product Characteristics - The certification process for new energy vehicle materials typically spans 3 to 7 years, involving multiple stages including material and motor certification [3] - Non-crystalline products currently account for over 95% of transformer core materials, with specific advantages and disadvantages compared to oriented electrical steel [3]

Company Overview - The company’s stock code is 000959, and it is listed on the Shenzhen Stock Exchange [18]. - The company’s registered address is located at Shijingshan Road, Shijingshan District, Beijing, with a postal code of 100041 [18]. - The company has maintained its main business operations without any changes since its listing [18]. - The accounting firm responsible for auditing the company is Deloitte Touche Tohmatsu Certified Public Accountants LLP [19]. - The company’s board of directors and senior management have confirmed the accuracy and completeness of the annual report [6]. - The company’s chairman is Zhao Minge, and the general manager is Liu Jianhui [18]. - The company has a total of 82.7688% ownership in Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd. [16]. - The company’s board secretary is Chen Yi, who can be contacted at 010-88293727 [18]. Financial Performance - The company's operating revenue for 2021 was ¥134.03 billion, an increase of 67.65% compared to ¥79.95 billion in 2020 [21]. - The net profit attributable to shareholders for 2021 reached ¥7.01 billion, a significant increase of 292.64% from ¥1.79 billion in 2020 [21]. - The net cash flow from operating activities was ¥15.04 billion, up 46.42% from ¥10.27 billion in 2020 [21]. - The basic earnings per share for 2021 was ¥1.1291, representing a growth of 234.35% compared to ¥0.3377 in 2020 [21]. - The total assets at the end of 2021 were ¥147.21 billion, a slight increase of 1.97% from ¥144.37 billion at the end of 2020 [21]. - The company reported a weighted average return on equity of 19.07%, an increase of 12.67 percentage points from 6.40% in 2020 [21]. - The company's debt-to-asset ratio decreased to 66.59%, down 6.51 percentage points from the previous year [46]. - The gross profit margin for the metallurgical industry was 11.29%, reflecting a year-on-year increase of 3.18% [49]. Production and Operations - The production of oriented electrical steel in China reached approximately 1.83 million tons in 2021, supporting the country's dual carbon policy [31]. - The company has become a global leader in the manufacturing of electrical steel, with a focus on high-performance products for the power and electronics industries [32]. - The company operates a large steel base designed with a circular economy concept, enhancing efficiency and reducing costs [32]. - The production of high magnetic permeability oriented electrical steel reached 54,000 tons, a 74% year-on-year increase, capturing a 60% market share [37]. - The automotive board production increased by 5% to 3.55 million tons, with significant growth in high-strength and galvanized products, achieving a 93% increase in order volume [37]. - The production of tinplate (tin-coated steel) reached 630,000 tons, with a capacity utilization rate of 120%, and significant exports to North America [38]. - The production of electrical steel was 1.50 million tons, a decrease of 2.7% year-on-year, while the sales revenue from soft magnetic materials was 13.31 billion yuan, accounting for 9.93% of total revenue [46]. Research and Development - Research and development investment reached 5.3 billion yuan, representing 3.97% of total revenue in 2021, with 450 patents granted, including 182 invention patents [34][35]. - The company is actively involved in the research and development of new technologies, including low-temperature slab heating processes for high magnetic induction oriented electrical steel [32]. - The company is developing new technologies and products, including low-temperature oriented silicon steel and high-performance electrical steel, to enhance market competitiveness [59]. - The company's R&D investment increased by 62.68% to approximately CNY 5.32 billion in 2021, compared to CNY 3.27 billion in 2020 [61]. Environmental Initiatives - The company’s green manufacturing initiatives have earned it multiple accolades, including recognition as a green low-carbon benchmark enterprise in the steel industry [40]. - The company is committed to enhancing its green initiatives and aims to implement low-carbon technologies to meet environmental regulations [88]. - The company has constructed 225 air pollution control facilities, including dust removal and desulfurization systems, to efficiently treat various emissions [162]. - The company achieved 100% compliance with pollutant discharge standards through self-monitoring and supervision by environmental authorities [161]. - The company has invested in new technologies to enhance its emission control systems, aiming for further reductions in particulate matter and sulfur emissions [158]. Strategic Focus and Future Outlook - The company aims to enhance profitability and innovation while improving asset quality and operational efficiency as part of its "Two Strong, Three Excellent" strategy [85]. - The company is focused on expanding its market presence and has outlined strategies for future growth, including potential mergers and acquisitions [93]. - The company plans to invest 4.364 billion CNY in fixed assets, with the largest allocation of 2.389 billion CNY to the Jing Tang company [86]. - The company is committed to becoming a large, comprehensive, and internationally competitive steel listed company [85]. - The company is exploring potential mergers and acquisitions to enhance its market position and expand its capabilities in environmentally friendly technologies [158]. Governance and Management - The company has a robust corporate governance structure, including a shareholders' meeting, board of directors, and supervisory board, operating independently [98]. - The company has established a performance evaluation mechanism for senior management, linking stock incentives to key performance indicators such as return on equity and operating profit growth [149]. - The company has maintained effective internal controls in all significant aspects as of December 31, 2021 [154]. - The company has actively engaged with over 40 investment analysts and institutions to foster strong investor relations [93]. - The company held its annual shareholder meeting with a participation rate of 77.05% on June 29, 2021 [101]. Employee Development - The company’s talent development strategy includes a multi-level training system, with notable awards received by employees for their contributions [43]. - The company organized over 150 training projects throughout the year, enhancing the skills of its workforce and supporting high-quality development [139]. - The total number of employees at the end of the reporting period was 17,846, including 5,646 at the parent company and 12,203 at major subsidiaries [136]. Related Party Transactions - The total amount of daily related transactions approved by the shareholders' meeting was 94,918,150 RMB, with actual transactions amounting to 93,389,460 RMB, remaining within the approved limit [195]. - The company has no significant related party transactions involving joint external investments during the reporting period [196]. - There were no related party debt and credit transactions during the reporting period [197].