马鞍山钢铁股份(00323) - 2025 - 中期业绩

Important Notice Report Overview and Responsibility Statement The semi-annual performance announcement summarizes the full report, with management guaranteeing its content and the financial report being unaudited but reviewed by the audit committee - This semi-annual performance announcement is a summary of the full semi-annual report; investors should carefully read the full report for a comprehensive understanding of the company's operations, financial position, and future development plans[3] - The company's Board of Directors, Supervisory Board, and senior management guarantee the truthfulness, accuracy, and completeness of the semi-annual report, with no false statements, misleading representations, or material omissions, and assume legal responsibility[3] - The financial report in this semi-annual report is unaudited but has been reviewed by the company's Board of Directors' Audit and Compliance Management Committee[3] Company Overview Company Profile Maanshan Iron & Steel Company Limited is listed on both Shanghai and Hong Kong stock exchanges, with disclosed contact information for its company secretary Company Stock Information | Stock Type | Listing Exchange | Stock Abbreviation | Stock Code | | :--- | :--- | :--- | :--- | | A-share | Shanghai Stock Exchange | Maanshan Steel | 600808 | | H-share | The Stock Exchange of Hong Kong Limited | Maanshan Iron & Steel | 00323 | Key Accounting Data and Financial Indicators As of June 30, 2025, total assets increased by 4.25% year-on-year, and net assets attributable to shareholders increased by 2.77%, with revenue decreasing by 11.47% but a turnaround to profit for total profit and net profit attributable to shareholders Key Accounting Data and Financial Indicators (Consolidated Statements) | Indicator | Current Period End/Current Period (RMB) | Previous Year End/Same Period Last Year (RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Balance Sheet: | | | | | Total Assets | 82,322,514,611 | 78,962,973,613 | 4.25 | | Net Assets Attributable to Shareholders of Listed Company | 23,901,475,700 | 23,257,460,660 | 2.77 | | Income Statement: | | | | | Operating Revenue | 38,075,533,544 | 43,007,478,790 | -11.47 | | Total Profit | 117,712,960 | -1,190,806,469 | Not applicable | | Net Profit Attributable to Shareholders of Listed Company | -74,780,316 | -1,144,779,937 | Not applicable | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-recurring Gains and Losses) | -108,239,155 | -1,236,755,384 | Not applicable | | Cash Flow Statement: | | | | | Net Cash Flow from Operating Activities | 940,725,426 | 1,227,796,059 | -23.38 | | Other Indicators: | | | | | Weighted Average Return on Net Assets (%) | -0.32 | -4.21 | Increased by 3.89 percentage points | | Basic Earnings Per Share (RMB/share) | -0.01 | -0.148 | Not applicable | Top 10 Shareholders' Holdings As of the end of the reporting period, Maanshan Iron & Steel (Group) Holding Co., Ltd. was the largest shareholder with a 48.35% stake, and Hong Kong Securities Clearing Company (Nominees) Limited was the second largest with 22.25% Top 10 Shareholders' Holdings | Shareholder Name | Shareholder Nature | Holding Percentage (%) | Number of Shares Held | | :--- | :--- | :--- | :--- | | Maanshan Iron & Steel (Group) Holding Co., Ltd. | State-owned Legal Person | 48.35 | 3,733,677,149 | | Hong Kong Securities Clearing Company (Nominees) Limited | Overseas Legal Person | 22.25 | 1,718,234,495 | | Central Huijin Asset Management Co., Ltd. | State-owned Legal Person | 1.80 | 139,172,300 | | Beijing Guoxing Property Management Co., Ltd. | Domestic Non-state-owned Legal Person | 0.61 | 46,997,901 | | Hong Kong Securities Clearing Company Limited | Overseas Legal Person | 0.50 | 38,661,246 | | Agricultural Bank of China Co., Ltd. - CSI 500 ETF | Other | 0.46 | 35,505,426 | | Shenzhen Qianhai Daoming Investment Management Co., Ltd. - Daoming No. 1 Private Securities Investment Fund | Other | 0.19 | 14,554,600 | | Huang Hairong | Domestic Natural Person | 0.15 | 11,477,081 | | Hong Zhenbo | Domestic Natural Person | 0.15 | 11,267,400 | | Guosen Securities Co., Ltd. | State-owned Legal Person | 0.14 | 11,088,800 | - Maanshan Iron & Steel (Group) Holding Co., Ltd. has no associated relationship with other aforementioned shareholders, nor are they acting in concert; the company is unaware of any associated relationships or concerted actions among other aforementioned shareholders[15] - Hong Kong Securities Clearing Company (Nominees) Limited holds 1,718,234,495 H-shares of the company, representing shares held by multiple clients, including 358,950,000 H-shares held on behalf of Baosteel Hong Kong Investment Co., Ltd[15] Changes in Controlling Shareholder or Actual Controller No changes occurred in the company's controlling shareholder or actual controller during the reporting period - No changes occurred in the company's controlling shareholder or actual controller during the reporting period[15] Corporate Bonds During the reporting period, the company had no outstanding or overdue corporate bonds - During the reporting period, the company had no outstanding or overdue corporate bonds[16] Management Discussion and Analysis Key Operating Performance In H1 2025, the company navigated market challenges and implemented strategic initiatives, resulting in a RMB 1.07 billion year-on-year profit increase for shareholders - In the first half of 2025, the company strictly implemented China Baowu's strategic deployment of "new stage, new strategy, new model," adhered to "four modernizations" and "four advantages," and actively responded to severe market challenges by focusing on enhancing value creation capabilities[17] - Through deep promotion of cost accounting, strengthened integrated synergy, continuous deepening of reform and innovation, and solid advancement of "three reductions and three enhancements" initiatives, the overall production and operation trend improved, and deepening reforms achieved phased progress[17] 2025 H1 Key Production Data | Product | Output (ten thousand tons) | | :--- | :--- | | Pig Iron | 936 | | Crude Steel | 1,035 | | Steel Products | 963 | 2025 H1 Key Financial Data | Indicator | Amount (RMB) | | :--- | :--- | | Operating Revenue | 38.076 billion | | Net Profit Attributable to Shareholders of Listed Company | -0.075 billion | | Year-on-year Profit Increase | 1.07 billion | Focusing on Value Creation, Significant Achievements in Internal Cost Reduction and Efficiency Improvement The company achieved significant internal cost reduction and efficiency improvement through adjusting procurement strategies, increasing orders for key products, optimizing production and maintenance models, and strengthening quality control, resulting in a RMB 91 per ton steel cost reduction in H1 - The procurement side actively adjusted procurement strategies, adopting slow procurement, small batches, and multiple deliveries to reduce procurement costs, with the average port spot price for iron ore outperforming the index by $4.58/ton cumulatively[18][19] - In the fuel sector, the coking coal procurement cost for January-June was RMB 1,267/ton, RMB 10.67/ton lower than the industry average, improving its industry ranking by 2 places compared to last year[19] - The marketing side increased orders for key products, with actual settlement of 2.769 million tons of key products in H1, achieving 52.9% of the target, and key product ratio and direct supply ratio reaching 35% and 73.4% respectively, up 5.0 and 8.5 percentage points year-on-year[19] - The manufacturing side optimized production and maintenance models, with Maanshan Iron & Steel Co., Ltd.'s 10 production lines setting 20 new monthly production records and 19 production lines setting 43 new daily production records[19] - Quality control was strengthened, with the post-steel product scrap rate decreasing by 1.14 percentage points and the spot occurrence rate decreasing by 0.66 percentage points by the end of June compared to the previous year[19] - During the reporting period, internal cost reduction and efficiency improvement through procurement and manufacturing resulted in a RMB 91 per ton steel cost reduction[19] Focusing on Product Management, Product Structure Adjustment Progressing as Planned The company made progress in product premiumization, key project construction, and international development, with key steel product settlement volume growing by 22% and new product sales per ton exceeding gross profit increasing by 39% - In terms of product premiumization, key steel product settlement reached 2.77 million tons, a 22% year-on-year increase; sales of new products reached 867,000 tons, with an excess gross profit per ton increasing by 39% year-on-year[20] - The first 2200MPa hot-formed steel passed Xiaomi Auto material certification and secured small-batch orders[20] - Progress was made in the localization of high-speed rail wheels, with Fuxing EMU self-developed wheelsets ready for mass installation, and CR400 Fuxing EMU self-developed wheels entering the China Railway Group supplier list and receiving orders[20] - For key project construction, the cold rolling 6 galvanized line project and the South Area section steel modification project's 3 continuous caster are expected to be substantially completed by year-end[20] - In international development, new markets such as Southeast Asia were developed, with cumulative exports reaching 554,000 tons in H1, of which wheel exports exceeded 90,000 units, accounting for approximately 45% of wheelset product operating revenue; H-beam exports reached 357,000 tons, a 5% sequential increase[20] Focusing on Institutional Breakthroughs, Internal and External Reforms Adding Vitality to Development The company implemented internal institutional reforms, establishing a blast furnace operation technical committee and a production-sales-research operation center, and separating steelmaking and rolling operations to enhance efficiency, while externally introducing Baosteel Co., Ltd. as a strategic investor with a 49% stake in Maanshan Iron & Steel Co., Ltd. - Internal reform: Established a blast furnace operation technical committee, setting up 5 teams per blast furnace, implementing incentive mechanisms to promote long-term stable and smooth blast furnace operation, and reducing hot metal costs[21] - Internal reform: Established a production-sales-research operation center, clarifying product management responsibilities and promoting deep improvements in product quality and operations[21] - Internal reform: Separated steelmaking and rolling to strengthen efficient production synergy and continuously improve production efficiency[21][22] - External reform: Injected main steel assets into Maanshan Iron & Steel Co., Ltd., introducing Baosteel Co., Ltd. as a strategic investor with a 49% stake, creating favorable conditions for deep synergistic development with Baosteel Co., Ltd[22] Focusing on Synergistic Development, Initial Results from Collaboration with Baosteel Co., Ltd. Maanshan Iron & Steel Co., Ltd. and Baosteel Co., Ltd. launched 172 synergistic support projects across procurement, production, marketing, and long/special steel, achieving good results and enabling Maanshan Iron & Steel Co., Ltd. to achieve monthly profitability since its independent operation in March - Maanshan Iron & Steel Co., Ltd. and Baosteel Co., Ltd. launched 172 synergistic support projects, covering procurement, production operations, R&D, long/special steel, and functional support[23] - Synergistic effects were significant, enabling Maanshan Iron & Steel Co., Ltd. to achieve monthly profitability since its independent operation in March[23] - Procurement synergy achieved cost reduction of RMB 77.07 million; production operation synergy optimized tundish pouring operations, reducing residual steel in tundishes; marketing synergy focused on product structure optimization and core users, with automotive plates alone creating RMB 3.17 million in synergistic value[23] - Long/special steel synergy guided the control of active oxygen during steelmaking and optimized deoxidation processes for molten steel and slag surface, reducing product cracking rate from 10% to 0.5% and increasing product orders[23] Focusing on Differentiated Competition, Significant Performance Improvement at Changjiang Steel Changjiang Steel fully implemented its "low cost, differentiated, high efficiency, fast pace" operating policy, significantly improving its operating performance with a 26% reduction in hot metal cost and an 18.62 percentage point increase in self-generated electricity ratio - Changjiang Steel fully implemented its "low cost, differentiated, high efficiency, fast pace" operating policy, significantly improving its operating performance[24] Changjiang Steel Performance Improvement (Year-on-year) | Indicator | Change | | :--- | :--- | | Hot Metal Cost | Decreased by 26% | | Self-generated Electricity Ratio | Increased by 18.62 percentage points | | Purchased Electricity Cost per Ton of Steel | Decreased by 22.97% | Outlook and Tasks for the Second Half The company anticipates steel demand to strengthen in H2, with steel prices potentially following a V-shaped trend and raw material prices fluctuating downwards, while focusing on value creation, cost accounting, benchmarking, synergy, and product structure adjustment to strive for no annual loss - In the second half, steel demand is expected to shift from weak to strong, supply from strong to weak, and steel prices may follow a V-shaped trend for the full year; raw material supply will increase while demand decreases, and prices may fluctuate downwards[25] - The external environment faces national development and reform commission's crude steel output reduction control; internal issues include insufficient production stability and low capacity utilization rates of production lines[25] - The company will actively respond to the severe situation, focus on value creation, deepen cost accounting, comprehensively benchmark and identify gaps, strengthen synergistic value creation, increase product structure adjustment, strive to improve the profit per ton of steel percentile, and aim to achieve no annual loss[25] Ensuring Stable and Smooth Production The company will adhere to the principle that "production stability is the biggest cost reduction," enhancing production stability by stabilizing blast furnace operations, improving steel rolling line efficiency, actively securing orders, strengthening equipment precision management, and promoting economic energy operation - Fully stabilize blast furnace production, ensuring Maanshan Iron & Steel Co., Ltd.'s hot metal daily output firmly maintains a 42,500-ton platform[26] - Improve steel rolling line efficiency, promote intensive production, orderly shut down long product small bar lines, modify long product large bar lines, and exit long product Zone 1 converters, reducing iron-to-steel ratio, increasing hot delivery ratio, and lowering iron and steel material consumption[26] - Actively secure orders, produce based on sales, strengthen synergy with Baosteel's marketing system, closely monitor key users, and conduct joint marketing and R&D[26] - Reduce accident rates, strengthen equipment precision management, optimize maintenance models, enhance point inspection management, and strengthen accident prevention and equipment status management[26] - Promote economic energy operation, effectively leveraging the energy working group's role to ensure supply, improve efficiency, and reduce losses[26] Comprehensively Deepening Benchmarking and Gap Analysis The company will adhere to the principle of "costs falling as market prices fall," focusing on cost and quality element management, benchmarking against advanced steel enterprises to drive full-element cost reduction and full-process quality improvement, enhancing cost competitiveness across all processes - Adhere to "costs falling as market prices fall," focusing on cost and quality element management[27] - Benchmark against advanced steel enterprises to drive full-element cost reduction and full-process quality improvement, synergistically enhancing cost competitiveness across all processes[27] - With "cost elements and quality elements" management as the main line, promote hot metal cost reduction to control the bottom line, tackle purchase-sale price differences to ensure profitability, manage daily costs for execution, and close the loop on incentives and constraints to improve efficiency[27] Closely Monitoring Both Procurement and Sales Markets The marketing side will adjust structure, increase exports, and optimize channels, aiming for 37% key product ratio and 7.8% export ratio, while the procurement side will strengthen slow procurement, multiple batches, and small batch strategies to outperform the market - Marketing side: Accelerate the shift of plate and strip products towards "cold series, high strength, coated, new energy," strengthen section steel, optimize special steel, and push the key product ratio to 37%[28] - Marketing side: Increase the direct supply ratio of cold series plates, further enhancing direct sales to end-users; consolidate and raise the proximity ratio to 89%[28] - Marketing side: Strengthen synergistic sales, utilize Baosteel's global marketing network for section steel sales; increase efforts in developing overseas end-customers, pushing the export ratio to 7.8%[28] - Procurement side: Strengthen slow procurement, multiple batches, small batches; expand supplier scope, increase bidding, and fully leverage centralized procurement[28] - Procurement side: Strengthen the matching of demand and resources, increase the use of cost-effective resources such as scrap steel, iron ore, and coal, flexibly respond to changes in market coal and long-term contract coal price differences, dynamically adjust the proportion of long-term contract coal; operate agilely, outperform the market, seize market rhythms, and ensure imported iron ore procurement outperforms the index[28] Strengthening Support for Technological Innovation The company will focus on product differentiation, consolidate and enhance key product categories, accelerate the mass application of 400 km/h high-speed rail wheelsets, strengthen R&D for automotive steel, and conduct core research on on-site process technology and green low-carbon metallurgical technology - Product management: Focus on product differentiation, consolidate and enhance key product categories, and improve market competitiveness[29] - Structural adjustment: Accelerate the mass application of 400 km/h high-speed rail wheelsets, maintaining a leading edge in wheelsets; focus on long product and special steel reforms, continuously strengthening R&D, production, and sales of section steel and special steel products[29] - Core research: Conduct research on on-site process technology, process platform technology, green low-carbon metallurgical technology, and applied basic technologies[29] - Industrial extension: Accelerate the transformation from materials to parts, from performance to function, and from products to services[29] Promoting "Three Reductions and Three Enhancements" The company will reduce ineffective assets, liabilities, and the scale of "two funds" (accounts receivable and inventory), while increasing overall labor productivity, the proportion of bidding and direct procurement, and the direct supply ratio, to optimize asset-liability structure and enhance market competitiveness - Reduce ineffective assets: Increase efforts in disposing of low-efficiency and ineffective assets[30] - Reduce liabilities and the scale of "two funds": Focus on the core tasks of "reducing liabilities, controlling two funds, and activating capital" to promote asset-liability structure optimization and full-cycle capital management[30] - Enhance overall labor productivity: Conduct comprehensive human resource benchmarking, optimize human resource allocation models, promote internal labor substitution, and continuously improve personnel efficiency[30] - Increase bidding and direct procurement ratios: Bid whenever possible, eliminate hidden barriers, and increase the bidding ratio; streamline source suppliers, reduce intermediate links, and increase the direct procurement ratio[30] - Increase direct supply ratio: Further strengthen channel construction, deepen strategic cooperation with key users, closely engage with regional markets to expand small and medium-sized end-customers, and further increase direct sales to end-users[30] Financial Position and Exchange Rate Risk As of the end of the reporting period, all company borrowings were in RMB, totaling RMB 22.108 billion, with fixed-rate borrowings accounting for RMB 16.987 billion, and the asset-liability ratio decreased by 4.91 percentage points to 60.49% Borrowing Structure | Borrowing Type | Amount (billion RMB) | | :--- | :--- | | Total Borrowings | 22.108 | | Short-term Borrowings | 13.181 | | Long-term Borrowings | 5.607 | | Long-term Borrowings Due Within One Year | 3.320 | | Fixed-rate Borrowings | 16.987 | | Floating-rate Borrowings | 5.121 | - As of the end of the reporting period, the Group's asset-liability ratio was 60.49%, a decrease of 4.91 percentage points compared to the end of 2024[31] - The company actively responded to exchange rate and interest rate fluctuation risks caused by divergent global monetary policies, operating under the principles of "cost locking, tool locking, exposure locking, and cash flow locking" to comprehensively deepen refined cross-border capital management[32] - In Q2 2025, new cross-border business models were introduced, directly opening RMB electronic spot letters of credit to mining companies totaling RMB 331 million, and handling cross-border RMB forward letter of credit business of RMB 168 million, thereby mitigating exchange rate fluctuation risks through RMB settlement[32] Internal Control and Risk Management The company implements an internal audit system and has established a comprehensive internal control system covering all aspects of production and operation management, focusing on high-risk areas such as procurement, operations, finance, and subsidiary management to effectively identify and control risks - The company implements an internal audit system, with an audit department responsible for internal audit supervision of the company's financial revenues, expenditures, and economic activities[33] - An internal control system has been established covering the entire production and operation management process, including internal environment, risk assessment, social responsibility, information and communication, internal supervision, human resources, capital management, procurement, asset management, sales, R&D, engineering projects, guarantee business, outsourcing, financial reporting, comprehensive budgeting, contract management, and information systems[33] - On March 28, 2025, the Board of Directors reviewed the 2024 Internal Control Evaluation Report, confirming that the company maintained effective internal controls in all material aspects for the year 2024, in accordance with the enterprise internal control standards system and relevant regulations[34] - On March 28, 2025, the Board of Directors reviewed the 2024 Comprehensive Risk Management and Internal Control Work Report and the 2025 Work Plan, confirming that the control measures taken by the company in 2024 for risks such as production safety, bulk raw material price fluctuations, exchange rate and interest rate fluctuations, cash flow control, environmental protection, and total energy consumption control were appropriate, and all risks were under control[35] Operating Results The company's operating revenue decreased by 11.47% year-on-year, primarily due to weak downstream demand and lower average steel prices, while operating costs decreased by 14.69% due to cost reduction measures and lower raw material prices, leading to a significant improvement in total profit and net profit Key Operating Results (Consolidated Statements) | Item | Current Period (RMB) | Same Period Last Year (RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 38,075,533,544 | 43,007,478,790 | -11.47 | | Operating Costs | 36,244,525,052 | 42,484,454,227 | -14.69 | | Selling Expenses | 137,798,991 | 144,367,917 | -4.55 | | Administrative Expenses | 437,312,708 | 434,826,631 | 0.57 | | R&D Expenses | 549,322,312 | 509,627,618 | 7.79 | | Financial Expenses | 245,618,668 | 316,659,664 | -22.43 | | Net Cash Flow from Operating Activities | 940,725,426 | 1,227,796,059 | -23.38 | | Net Cash Flow from Investing Activities | -1,619,631,859 | -703,896,902 | Not applicable | | Net Cash Flow from Financing Activities | 2,297,776,926 | 329,780,103 | 596.76 | | Other Income | 219,162,236 | 133,118,240 | 64.64 | | Investment Income | 13,557,382 | 84,287,590 | -83.92 | | Credit Impairment (Loss)/Profit | -9,568,661 | 16,310,120 | -158.67 | | Gains on Disposal of Assets | 11,386,204 | 73,529,933 | -84.51 | | Operating Profit/(Loss) | 112,596,584 | -1,182,027,063 | Not applicable | | Non-operating Income | 17,953,725 | 733,269 | 2,348.45 | | Non-operating Expenses | 12,837,349 | 9,512,675 | 34.95 | | Total Profit/(Loss) | 117,712,960 | -1,190,806,469 | Not applicable | | Income Tax Expense | 77,493,175 | 121,089,148 | -36.00 | | Net Profit/(Loss) | 40,219,785 | -1,311,895,617 | Not applicable | | Net Loss Attributable to Parent Company Shareholders | -74,780,316 | -1,144,779,937 | Not applicable | | Minority Interests | 115,000,101 | -167,115,680 | Not applicable | - Operating revenue decreased by 11.47%, primarily due to the continuous weak demand in downstream industries, leading to a year-on-year decrease in the average price of steel products in the current period[38] - Operating costs decreased by 14.69%, primarily due to the company's continuous promotion of cost reduction and efficiency improvement across all processes, coupled with a year-on-year decrease in prices of raw materials such as iron ore and coking coal in the current period[38] - Net cash inflow from financing activities increased by 596.76%, mainly because Baosteel Co., Ltd. acquired a 35.42% equity stake in Maanshan Iron & Steel Co., Ltd. held by Maanshan Iron & Steel Co., Ltd. for RMB 5.139 billion in the current period, and the first installment of RMB 2.57 billion has been received[39] - Operating profit, total profit, net profit, and net loss attributable to parent company shareholders improved year-on-year, mainly due to a better purchase-sale price difference in the current period, and the company's efforts to continuously improve operating performance through cost accounting, full-element cost reduction, and full-process quality improvement[40] Matters Related to Financial Reports Changes in Accounting Policies, Estimates, and Methods There were no changes in the Group's accounting policies, accounting estimates, and accounting methods compared to the previous accounting period - There were no changes in the Group's accounting policies, accounting estimates, and accounting methods compared to the previous accounting period[43] Correction of Material Accounting Errors No material accounting errors requiring retrospective restatement occurred during the reporting period - No material accounting errors requiring retrospective restatement occurred during the reporting period[43] Changes in Consolidation Scope of Financial Statements Anhui Changjiang Steel Trading Hefei Co., Ltd. was absorbed and merged by its parent company, Anhui Changjiang Steel, and is no longer included in the consolidation scope; otherwise, there were no changes compared to the previous year's financial report - Anhui Changjiang Steel Trading Hefei Co., Ltd. was absorbed and merged by the company's subsidiary, Anhui Changjiang Steel, on January 27, 2025, and is no longer included in the consolidation scope[41] - Other than this, there were no changes in the consolidation scope of the financial statements compared to the previous year's financial report[41] Other Matters Work of the Audit Committee The company's Audit Committee, composed of four independent directors, has reviewed the 2025 semi-annual performance - The company's Audit Committee is composed of independent directors Ms Zeng Xiangfei, Mr Guan Bingchun, Mr He Anrui, and Mr Qiu Shengtao[42] - The Audit Committee has reviewed the 2025 semi-annual performance[42] Material Events Affecting the Group After the Reporting Period After the reporting period, the company's shareholders' meeting approved a supplementary agreement for the 2025-2027 product purchase and sales agreement with China Baowu Steel Group Corporation Limited, and Mr Zhang Wenxiang resigned as director, general manager, and CFO, with Mr Chen Guorong appointed as deputy general manager and CFO - On July 30, 2025, the company's shareholders' meeting reviewed and approved the supplementary agreement for the 2025–2027 product purchase and sales agreement between the company and China Baowu Steel Group Corporation Limited[44] - On August 15, 2025, Mr Zhang Wenxiang resigned as the company's director, general manager, and chief financial officer, and the Board of Directors appointed Mr Chen Guorong as deputy general manager and chief financial officer[44] Purchase, Sale, and Redemption of Listed Shares During the reporting period, neither the company nor its subsidiaries redeemed, purchased, or resold any listed shares - During the reporting period, the company did not redeem its listed shares, nor did the company or its subsidiaries purchase or resell any of the company's listed shares[45] Pre-emptive Rights Neither Chinese law nor the company's articles of association require existing shareholders to have pre-emptive rights to purchase new shares in proportion to their holdings when the company issues new shares - Neither Chinese law nor the company's articles of association stipulate that existing shareholders must have pre-emptive rights to purchase new shares in proportion to their holdings when the company issues new shares[46] Corporate Governance Code During the reporting period, the company complied with all code provisions of Appendix C1 – Corporate Governance Code of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited - During the reporting period, the company complied with all code provisions of Appendix C1 – Corporate Governance Code of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[47] Standard Securities Dealing Code for Directors of Listed Issuers During the reporting period, all company directors complied with the provisions of Appendix C3 – Standard Securities Dealing Code for Directors of Listed Issuers of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, with no deviations found - During the reporting period, all company directors complied with the provisions of Appendix C3 – Standard Securities Dealing Code for Directors of Listed Issuers of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, with no deviations found[48] Shareholder Rights Shareholders holding 10% or more of the total voting shares have the right to convene an extraordinary general meeting, and eligible shareholders can submit new proposals in writing or send inquiries to the Board of Directors - Shareholders holding 10% or more (inclusive of 10%) of the total voting shares of the company, individually or collectively, have the right to convene an extraordinary general meeting in accordance with the company's Articles of Association[49] - Shareholders meeting the requirements of Article 58 of the Articles of Association have the right to submit new proposals to the company in writing in accordance with that article[49] - Shareholders can submit inquiries and express opinions to the company's Board of Directors by writing to the company (located at No 8, Jiuhua West Road, Maanshan City, Anhui Province, China)[49] Consolidated and Company Financial Statements Consolidated and Company Balance Sheets As of June 30, 2025, the company's consolidated total assets were RMB 82.323 billion, a 4.25% increase from the end of 2024, with current liabilities exceeding current assets by approximately RMB 18.381 billion, yet the Board believes the company has sufficient working capital for continuous operation Consolidated Balance Sheet Key Data | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Assets: | | | | Total Current Assets | 24,543,559,513 | 19,472,010,226 | | Total Non-current Assets | 57,778,955,098 | 59,490,963,387 | | Total Assets | 82,322,514,611 | 78,962,973,613 | | Liabilities: | | | | Total Current Liabilities | 42,924,120,705 | 44,845,617,126 | | Total Non-current Liabilities | 6,873,814,332 | 6,796,304,286 | | Total Liabilities | 49,797,935,037 | 51,641,921,412 | | Shareholders' Equity: | | | | Total Equity Attributable to Parent Company Shareholders | 23,901,475,700 | 23,257,460,660 | | Minority Interests | 8,623,103,874 | 4,063,591,541 | | Total Shareholders' Equity | 32,524,579,574 | 27,321,052,201 | - As of June 30, 2025, the Group's current liabilities exceeded current assets by approximately RMB 18,380,561,192[66] - The company's Board of Directors, considering the Group's available funding sources, including unused bank credit lines of RMB 50.1 billion, and expected net cash inflows from operating activities over the next 12 months, believes the Group has sufficient working capital to continue as a going concern[66] Consolidated and Company Income Statements For the six months ended June 30, 2025, the company's consolidated operating revenue was RMB 38.076 billion, a 11.47% year-on-year decrease, with net profit turning from a loss of RMB 1.312 billion in the prior year to a profit of RMB 40.22 million Consolidated Income Statement Key Data | Item | For the Six Months Ended June 30, 2025 (RMB) | For the Six Months Ended June 30, 2024 (RMB) | | :--- | :--- | :--- | | Operating Revenue | 38,075,533,544 | 43,007,478,790 | | Operating Costs | 36,244,525,052 | 42,484,454,227 | | Operating Profit/(Loss) | 112,596,584 | -1,182,027,063 | | Total Profit/(Loss) | 117,712,960 | -1,190,806,469 | | Net Profit/(Loss) | 40,219,785 | -1,311,895,617 | | Net Loss Attributable to Parent Company Shareholders | -74,780,316 | -1,144,779,937 | | Minority Interests | 115,000,101 | -167,115,680 | | Total Comprehensive Income | 36,005,034 | -1,331,838,029 | | Basic Earnings Per Share (cents/share) | -1.00 | -14.87 | | Diluted Earnings Per Share (cents/share) | -1.00 | -14.87 | Consolidated Statement of Changes in Equity As of June 30, 2025, the company's consolidated shareholders' equity totaled RMB 32.525 billion, an increase of 19.0% from the beginning of the period, primarily due to total comprehensive income, share capital cancellation, increased capital reserves, and the appropriation and use of special reserves Consolidated Statement of Changes in Equity Key Data | Item | For the Six Months Ended June 30, 2025 (RMB) | For the Six Months Ended June 30, 2024 (RMB) | | :--- | :--- | :--- | | Beginning Balance | 27,321,052,201 | 32,279,541,351 | | Total Comprehensive Income | 36,005,034 | -1,331,838,029 | | Cancellation of Restricted Shares | -24,833,400 | - | | Increase in Capital Reserve | 700,938,635 | 2,672,806 | | Special Reserve Appropriated in Current Period | 46,530,115 | 34,223,654 | | Special Reserve Used in Current Period | -30,874,706 | -21,915,747 | | Ending Balance | 32,524,579,574 | 30,949,995,328 | Consolidated Cash Flow Statement For the six months ended June 30, 2025, net cash flow from operating activities was RMB 941 million, a 23.38% year-on-year decrease, while net cash inflow from financing activities significantly increased by 596.76% to RMB 2.298 billion, mainly due to the receipt of equity transfer payments from Baosteel Co., Ltd. Consolidated Cash Flow Statement Key Data | Item | For the Six Months Ended June 30, 2025 (RMB) | For the Six Months Ended June 30, 2024 (RMB) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 940,725,426 | 1,227,796,059 | | Net Cash Flow from Investing Activities | -1,619,631,859 | -703,896,902 | | Net Cash Flow from Financing Activities | 2,297,776,926 | 329,780,103 | | Effect of Exchange Rate Changes on Cash and Cash Equivalents | 8,636,839 | -2,149,341 | | Net Increase in Cash and Cash Equivalents | 1,627,507,332 | 851,529,919 | | Cash and Cash Equivalents at End of Period | 5,314,623,729 | 5,280,124,127 | - Net cash inflow from financing activities increased by 596.76%, mainly because Baosteel Co., Ltd. acquired a 35.42% equity stake in Maanshan Iron & Steel Co., Ltd. held by Maanshan Iron & Steel Co., Ltd. for RMB 5.139 billion in the current period, and the first installment of RMB 2.57 billion has been received[39] Notes to Financial Statements Significant Accounting Policies These financial statements are prepared in accordance with the Accounting Standards for Business Enterprises issued by the Ministry of Finance, presented on a going concern basis, and measured at historical cost, except for certain financial instruments - These financial statements are prepared in accordance with the Accounting Standards for Business Enterprises – Basic Standards and subsequent specific accounting standards, application guidelines, interpretations, and other relevant regulations (collectively referred to as "Enterprise Accounting Standards") issued and revised by the Ministry of Finance[65] - These financial statements are presented on a going concern basis; the company's Board of Directors believes the Group has sufficient working capital to continue as a going concern for a foreseeable future period of not less than 12 months from the end of the reporting period[66] - In preparing these financial statements, all items are measured at historical cost, except for certain financial instruments[67] Scope of Consolidation for Consolidated Financial Statements Anhui Changjiang Steel Trading Hefei Co., Ltd. was absorbed and merged by the company's subsidiary, Anhui Changjiang Steel, and is no longer included in the consolidation scope - Anhui Changjiang Steel Trading Hefei Co., Ltd. was absorbed and merged by the company's subsidiary, Anhui Changjiang Steel, on January 27, 2025, and is no longer included in the consolidation scope[69] Segment Reporting The Group's business is internally reported, resources allocated, and performance evaluated as a whole, primarily focusing on the production and sale of steel products and by-products, with steel product sales revenue of RMB 33.62 billion in H1 and 93.06% of total revenue from mainland China - The Group focuses on the production and sale of steel products and by-products[70] External Main Business Revenue (by Product and Service) | Product Category | For the Six Months Ended June 30, 2025 (RMB) | | :--- | :--- | | Steel Product Sales | 33,619,563,472 | | Steel Billet and Pig Iron Sales | 1,917,491,289 | | Other | 2,538,478,783 | | Total | 38,075,533,544 | External Main Business Revenue (by Geographical Information) | Region | For the Six Months Ended June 30, 2025 (RMB) | | :--- | :--- | | Mainland China | 35,432,194,574 | | Overseas and Hong Kong | 2,643,338,970 | | Total | 38,075,533,544 | - The Group does not rely on a single customer, and revenue from any single customer does not exceed 10% of total revenue[72] Accounts Receivable As of June 30, 2025, the book value of the company's accounts receivable was RMB 1.67 billion, with the highest proportion being within 1 year of age, and no actual write-offs of bad debt provisions or derecognition due to financial asset transfers occurred in the current period Accounts Receivable Aging Analysis | Aging | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Within 1 year | 1,649,390,045 | 1,759,620,406 | | 1 to 2 years | 105,228,714 | 132,286,416 | | 2 to 3 years | 132,054,820 | 64,863,225 | | Over 3 years | 29,658,012 | 15,325,306 | | Subtotal | 1,916,331,591 | 1,972,095,353 | | Less: Provision for Bad Debts | 246,146,811 | 218,270,897 | | Total | 1,670,184,780 | 1,753,824,456 | - As of June 30, 2025, the Group had no actual write-offs of bad debt provisions for accounts receivable[74] - As of June 30, 2025, and December 31, 2024, there were no accounts receivable balances that were derecognized by the Group due to the transfer of financial assets[75] Receivables Financing As of June 30, 2025, the company's receivables financing primarily consisted of bank acceptance bills totaling RMB 2.585 billion, a significant increase from the end of 2024, with RMB 15.491 billion of notes receivable derecognized due to discounting to financial institutions in the current period Receivables Financing Composition | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Bank Acceptance Bills | 2,585,459,712 | 1,382,456,994 | - As of June 30, 2025, the Group derecognized notes receivable amounting to RMB 15,490,720,777 (2024: RMB 12,733,067,788) due to discounting to financial institutions, and recognized discounting expenses of RMB 25,621,413 (2024: RMB 2,173,662)[78] Prepayments As of June 30, 2025, the company's total prepayments amounted to RMB 416 million, with 97% of the balance having an aging period of less than 1 year Prepayments Aging Analysis | Aging | Book Balance as of June 30, 2025 (RMB) | Percentage (%) | | :--- | :--- | :--- | | Within 1 year | 402,098,775 | 97 | | 1 to 2 years | 12,419,435 | 3 | | 2 to 3 years | 1,076,697 | – | | Total | 415,594,907 | 100 | Notes Payable As of June 30, 2025, the company's notes payable primarily consisted of bank acceptance bills totaling RMB 10.225 billion, with no overdue notes payable Notes Payable Composition | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Bank Acceptance Bills | 10,225,214,715 | 10,051,474,326 | - As of June 30, 2025, the Group had no overdue notes payable[81] Accounts Payable As of June 30, 2025, the company's total accounts payable amounted to RMB 8.644 billion, with the highest proportion being within 1 year of age Accounts Payable Aging Analysis | Aging | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Within 1 year | 8,612,215,704 | 10,408,069,219 | | 1 to 2 years | 15,504,689 | 177,175,303 | | 2 to 3 years | 1,238,227 | 35,015,927 | | Over 3 years | 15,192,220 | 53,412,429 | | Total | 8,644,150,840 | 10,673,672,878 | Dividends The Board of Directors does not recommend the payment of any dividends for the year ended June 30, 2025 - The Board of Directors does not recommend the payment of any dividends for the year ended June 30, 2025[83] Operating Revenue and Costs For the six months ended June 30, 2025, the company's main business revenue was RMB 36.639 billion, and other business revenue was RMB 1.436 billion, with revenue primarily recognized at a point in time, and RMB 4.123 billion of revenue recognized from contract liabilities' opening balance Operating Revenue and Costs Composition | Item | For the Six Months Ended June 30, 2025 (RMB) | For the Six Months Ended June 30, 2024 (RMB) | | :--- | :--- | :--- | | Revenue | | | | Main Business | 36,639,298,472 | 41,629,746,736 | | Other Business | 1,436,235,072 | 1,377,732,054 | | Total Revenue | 38,075,533,544 | 43,007,478,790 | | Costs | | | | Main Business | 34,798,921,762 | 41,164,732,434 | | Other Business | 1,445,603,290 | 1,319,721,793 | | Total Costs | 36,244,525,052 | 42,484,454,227 | Revenue Recognition Timing from Contracts with Customers | Recognition Timing | For the Six Months Ended June 30, 2025 (RMB) | | :--- | :--- | | Revenue recognized at a point in time | 38,031,454,822 | | Revenue recognized over a period of time | 40,352,781 | - Revenue recognized in the current year included in the opening balance of contract liabilities was RMB 4,123,176,032[87] Financial Expenses For the six months ended June 30, 2025, the company's financial expenses were RMB 246 million, a 22.43% year-on-year decrease, primarily comprising interest expenses of RMB 286 million and exchange gains/losses of RMB 18.75 million Financial Expenses Composition | Item | For the Six Months Ended June 30, 2025 (RMB) | For the Six Months Ended June 30, 2024 (RMB) | | :--- | :--- | :--- | | Interest Expense | 285,555,450 | 312,774,907 | | Less: Interest Income | 66,937,989 | 45,988,335 | | Less: Capitalized Interest | – | 702,361 | | Exchange Gains and Losses | 18,748,612 | 41,563,728 | | Other | 8,252,595 | 9,011,725 | | Total | 245,618,668 | 316,659,664 | Gains on Disposal of Assets For the six months ended June 30, 2025, the company's gains on disposal of assets were RMB 11.39 million, a 84.51% year-on-year decrease, primarily from the disposal of fixed and intangible assets Gains on Disposal of Assets Composition | Item | For the Six Months Ended June 30, 2025 (RMB) | For the Six Months Ended June 30, 2024 (RMB) | | :--- | :--- | :--- | | Gains on Disposal of Fixed Assets | 4,245,809 | 57,901,418 | | Gains on Disposal of Intangible Assets | 7,140,395 | 15,628,515 | | Total | 11,386,204 | 73,529,933 | Non-operating Income For the six months ended June 30, 2025, the company's non-operating income was RMB 17.95 million, a significant year-on-year increase of 2,348.45%, primarily due to the write-off of certain unpayable amounts in the current period Non-operating Income Composition | Item | For the Six Months Ended June 30, 2025 (RMB) | For the Six Months Ended June 30, 2024 (RMB) | | :--- | :--- | :--- | | Other | 17,953,725 | 733,269 | - Non-operating income increased by 2,348.45%, mainly due to the write-off of certain unpayable amounts by the company in the current period[40] Non-operating Expenses For the six months ended June 30, 2025, the company's non-operating expenses were RMB 12.84 million, a 34.95% year-on-year increase, primarily composed of fixed asset disposal losses and other expenses Non-operating Expenses Composition | Item | For the Six Months Ended June 30, 2025 (RMB) | For the Six Months Ended June 30, 2024 (RMB) | | :--- | :--- | :--- | | Fixed Asset Disposal Losses | 8,823,155 | 876,676 | | Fines and Penalties | – | 2,144,476 | | Public Welfare Donations | – | 187,150 | | Other | 4,014,194 | 6,304,373 | | Total | 12,837,349 | 9,512,675 | - Non-operating expenses increased by 34.95%, mainly due to a year-on-year increase in the company's fixed asset disposal losses in the current period[40] Income Tax Expense For the six months ended June 30, 2025, the company's income tax expense was RMB 77.49 million, a 36.00% year-on-year decrease, primarily comprising current income tax expense in mainland China and deferred income tax expense, with differences mainly due to subsidiaries' varying tax rates and unrecognized deductible temporary differences Income Tax Expense Composition | Item | For the Six Months Ended June 30, 2025 (RMB) | For the Six Months Ended June 30, 2024 (RMB) | | :--- | :--- | :--- | | Current Income Tax Expense in Mainland China | 55,725,004 | 90,571,090 | | Current Income Tax Expense in Hong Kong | 345 | -165 | | Current Income Tax Expense Overseas | 12,488,032 | 14,357,070 | | Deferred Income Tax Expense | 9,279,794 | 16,161,153 | | Total | 77,493,175 | 121,089,148 | - Income tax expense decreased by 36.00%, mainly due to a year-on-year decrease in income tax expense for Maanshan Transportation Materials and Cihu Processing[40] - The difference between income tax expense and total profit is mainly affected by the different tax rates applicable to subsidiaries (-RMB 33.65 million) and the impact of deductible temporary differences for which deferred income tax assets were not recognized in the current period (RMB 141 million)[92] Earnings Per Share For the six months ended June 30, 2025, the company's basic and diluted earnings per share were both -RMB 0.01/share, a significant improvement from -RMB 0.15/share in the prior year, with diluted EPS being the same as basic EPS due to the anti-dilutive nature of potential ordinary shares Earnings Per Share | Indicator | For the Six Months Ended June 30, 2025 (RMB/share) | For the Six Months Ended June 30, 2024 (RMB/share) | | :--- | :--- | :--- | | Basic Earnings Per Share (Continuing Operations) | -0.01 | -0.15 | | Diluted Earnings Per Share (Continuing Operations) | -0.01 | -0.15 | - Basic earnings per share are calculated by dividing the net profit attributable to the company's ordinary shareholders for the current period by the weighted average number of ordinary shares outstanding[93] - As a net loss occurred in the current period, potential ordinary shares are anti-dilutive, thus diluted earnings per share are the same as basic earnings per share[94] Contingencies The company has a contingency related to income tax differences from previous years, specifically the 2007 corporate income tax rate adjustment, for which no provision or adjustment has been made due to uncertainty in the tax authority's decision and inability to reliably estimate the final outcome - The company is one of the nine companies mentioned in the State Administration of Taxation's "Notice on Issues Concerning the Collection and Administration of Corporate Income Tax for Nine Overseas Listed Companies Including Shanghai Petrochemical Company Limited" in 2007, and applied a preferential tax rate of 15% in previous years[95][96] - The company adjusted its 2007 corporate income tax rate from the original 15% to 33% but did not pay the income tax differences from previous years[96] - The company's directors believe that it is currently uncertain whether the competent tax authority will pursue the collection of income tax differences from previous years, and the final outcome cannot be reliably estimated, thus no provision or adjustment has been made for potential income tax differences from previous years[96] Events After the Balance Sheet Date As of the approval date of these financial statements, the Group has no significant events after the balance sheet date that require disclosure - As of the approval date of these financial statements, the Group has no significant events after the balance sheet date that require disclosure[97]