马鞍山钢铁股份(00323) - 2025 - 中期财报

Section I Definitions This section provides definitions of common terms used in the report, ensuring clear understanding of the content Definitions of Common Terms This section defines key terms such as company names, major shareholders, relevant institutions, operating principles, and the reporting period - Company, the Company, and Maanshan Iron & Steel all refer to Maanshan Iron & Steel Company Limited[9] - The Group refers to the Company and its subsidiaries[9] - China Baowu is the controlling shareholder of Magang Group, which is the direct controlling shareholder of the Company[9] - The Reporting Period refers to January 1, 2025, to June 30, 2025[10] - "Four Modernizations" refers to the development path of high-end, intelligent, green, and efficient; "Four Haves" refers to production with orders, revenue with profit, output with margin, and profit with cash[10] Section II Company Profile and Key Financial Indicators This section provides an overview of the company's basic information, contact details, stock profile, and key financial performance metrics I. Company Information This section outlines the company's basic registration information, including its Chinese name, abbreviation, foreign name, and legal representative - The company's Chinese name is Maanshan Iron & Steel Company Limited, abbreviated as Maanshan Iron & Steel[11] - The legal representative is Jiang Yuxiang[11] II. Contact Persons and Information This section provides detailed contact information for the Company Secretary and Joint Company Secretary, facilitating communication with investors and the public - The Company Secretary is He Hongyun, and the Joint Company Secretary is Zhao Kaishan[12] - Company contact addresses include No. 8 Jiuhua West Road, Maanshan City, Anhui Province, China, and Chinese Bank Building, 61 Des Voeux Road Central, Hong Kong, China[12] III. Brief Introduction to Changes in Basic Information The company's registered address has remained at No. 8 Jiuhua West Road, Maanshan City, Anhui Province, since June 2009, with its official websites also listed - The company's registered address has been No. 8 Jiuhua West Road, Maanshan City, Anhui Province, since June 2009[13] - The company's website is www.magang.com.cn (A-shares) and www.magang.com.hk (H-shares)[13] IV. Brief Introduction to Changes in Information Disclosure and Document Placement The company designates "Shanghai Securities News" for information disclosure and publishes its semi-annual report on the SSE and HKEX websites, with reports available at the Company Secretary's Office - The company's designated information disclosure newspaper is "Shanghai Securities News"[14] - The semi-annual report is published on www.sse.com.cn and www.hkex.com.hk[14](index=14&type=chunk) V. Company Stock Profile The company's A-shares and H-shares are listed on the Shanghai Stock Exchange and Hong Kong Stock Exchange respectively, with their abbreviations, codes, and transfer registration details provided Company Stock Profile | Stock Type | Listing Exchange | Stock Abbreviation | Stock Code | | :--- | :--- | :--- | :--- | | A-shares | Shanghai Stock Exchange | Maanshan Iron & Steel | 600808 | | H-shares | Hong Kong Stock Exchange | Maanshan Iron & Steel | 00323 | - The company's A-share transfer registration office is China Securities Depository and Clearing Corporation Limited, Shanghai Branch[16] - The company's H-share transfer registration office is Hong Kong Registrars Limited[16] VI. Key Accounting Data and Financial Indicators During the reporting period, operating revenue decreased by 11.47% year-on-year, but net loss attributable to shareholders significantly narrowed from RMB 1.145 billion to RMB 0.075 billion, while net cash flow from operating activities decreased by 23.38% Key Accounting Data (January-June 2025 vs. Prior Year Period) | Key Accounting Data | Current Reporting Period (Jan–Jun) (RMB) | Prior Year Period (RMB) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 38,075,533,544 | 43,007,478,790 | -11.47 | | Total Profit | 117,712,960 | -1,190,806,469 | N/A | | Net Profit Attributable to Shareholders | -74,780,316 | -1,144,779,937 | N/A | | Net Cash Flow from Operating Activities | 940,725,426 | 1,227,796,059 | -23.38 | | Net Assets Attributable to Shareholders | 23,901,475,700 | 23,257,460,660 | 2.77 | | Total Assets | 82,322,514,611 | 78,962,973,613 | 4.25 | | Total Share Capital | 7,722,104,586 | 7,746,937,986 | -0.32 | Key Financial Indicators (January-June 2025 vs. Prior Year Period) | Key Financial Indicators | Current Reporting Period (Jan–Jun) | Prior Year Period | YoY Change (%) | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (RMB/share) | -0.01 | -0.148 | N/A | | Diluted Earnings Per Share (RMB/share) | -0.01 | -0.148 | N/A | | Weighted Average Return on Net Assets (%) | -0.32 | -4.21 | Increased by 3.89 percentage points | | Weighted Average Return on Net Assets (Excluding Non-recurring Gains/Losses) (%) | -0.47 | -4.55 | Increased by 4.08 percentage points | (I) Key Accounting Data In H1 2025, operating revenue was RMB 38.076 billion, a 11.47% year-on-year decrease, while net loss attributable to shareholders significantly narrowed to RMB 0.075 billion Key Accounting Data (January-June 2025 vs. Prior Year Period) | Key Accounting Data | Current Reporting Period (Jan–Jun) (RMB) | Prior Year Period (RMB) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 38,075,533,544 | 43,007,478,790 | -11.47 | | Net Profit Attributable to Shareholders | -74,780,316 | -1,144,779,937 | N/A | | Net Cash Flow from Operating Activities | 940,725,426 | 1,227,796,059 | -23.38 | | Net Assets Attributable to Shareholders | 23,901,475,700 | 23,257,460,660 | 2.77 | | Total Assets | 82,322,514,611 | 78,962,973,613 | 4.25 | (II) Key Financial Indicators Basic earnings per share improved to -RMB 0.01/share, and weighted average return on net assets increased by 3.89 percentage points, indicating profitability recovery Key Financial Indicators (January-June 2025 vs. Prior Year Period) | Key Financial Indicators | Current Reporting Period (Jan–Jun) | Prior Year Period | YoY Change (%) | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (RMB/share) | -0.01 | -0.148 | N/A | | Weighted Average Return on Net Assets (%) | -0.32 | -4.21 | Increased by 3.89 percentage points | | Weighted Average Return on Net Assets (Excluding Non-recurring Gains/Losses) (%) | -0.47 | -4.55 | Increased by 4.08 percentage points | VII. Non-recurring Gains and Losses and Amounts Total non-recurring gains and losses amounted to RMB 33.4588 million, primarily from government subsidies and asset disposals Non-recurring Gains and Losses and Amounts | Non-recurring Gains and Losses Item | Amount (RMB) | | :--- | :--- | | Gains/losses on disposal of non-current assets | 2,563,049 | | Government subsidies recognized in current profit/loss | 22,642,603 | | Fair value changes and disposal gains/losses from financial assets and liabilities held by non-financial enterprises | 1,058 | | Other non-operating income and expenses apart from the above | 13,939,531 | | Less: Income tax impact | -3,192,947 | | Less: Impact on minority interests (after tax) | -2,494,455 | | Total | 33,458,839 | Section III Management Discussion and Analysis This section provides a comprehensive discussion and analysis of the company's industry, operations, core competencies, and financial performance during the reporting period I. Industry and Principal Business Overview During the Reporting Period In H1 2025, the steel industry experienced "reduced output, optimized inventory, and recovering profitability" amid stable economic growth, with the company maintaining its diversified steel product business - In H1 2025, national GDP grew by 5.3%, and the steel industry showed characteristics of "reduced output, optimized inventory, and recovering profitability"[24] Key Steel Industry Data (January-June 2025) | Indicator | Data | YoY Change | | :--- | :--- | :--- | | Domestic Crude Steel Production | 515 million tons | -3% | | Apparent Crude Steel Consumption | 450 million tons | -5.7% | | Steel Exports | 58.147 million tons | +9.2% | | Average Domestic Steel Composite Price Index | 93.75 points | -13.35% | | Average Imported Iron Ore Price | - | -16.7% | | Coking Coal Procurement Cost | - | -32.04% | | Metallurgical Coke Procurement Cost | - | -28.64% | - The company's principal business is the production and sale of steel products, making it one of China's largest steel producers and sellers by single production base[25] - The company's products consist of four major series: "special steel, wheels and axles, long products, and plates," widely used in aviation, railway, automotive, and other fields[25] II. Discussion and Analysis of Operations In H1 2025, the company achieved overall improved operations and a RMB 1.07 billion year-on-year profit increase in net profit attributable to the parent, driven by cost reduction, product adjustment, and strategic synergies, aiming to avoid full-year losses - In H1 2025, the Group produced 9.36 million tons of pig iron, 10.35 million tons of crude steel, and 9.63 million tons of steel products[26] H1 2025 Key Financial Data | Indicator | Amount (RMB) | | :--- | :--- | | Operating Revenue | 38.076 billion | | Net Profit Attributable to Shareholders | -0.075 billion | | Year-on-year Profit Increase | 1.07 billion | - Through internal cost reduction and efficiency improvement in procurement and manufacturing, unit steel cost was reduced by RMB 91[28] - Settlement of key steel products reached 2.77 million tons, a 22% year-on-year increase; sales of new products reached 867,000 tons, with unit material excess gross profit increasing by 39% year-on-year[29] - Maanshan Iron & Steel Co., Ltd. (Magang Limited) introduced Baosteel Co. as a strategic investor with a 49% stake, creating favorable conditions for deep synergistic development with Baosteel Co[30] - 172 supporting projects were jointly carried out with Baosteel Co., driving Magang Limited to achieve monthly profitability since its independent operation in March[32] - Changjiang Steel's hot metal cost decreased by 26%, and its self-generated power ratio increased by 18.62 percentage points[32] - In H2, the company will actively respond to the severe situation, focus on value creation, deepen accounting-based management, and strive to avoid losses for the full year[33] Cash Flow Changes (H1 2025 vs. Prior Year Period) | Item | H1 2025 (RMB) | Prior Year Period (RMB) | Change | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 0.941 billion | 1.228 billion | Decreased by 0.287 billion | | Net Cash Outflow from Investing Activities | 1.620 billion | 0.704 billion | Increased by 0.916 billion | | Net Cash Inflow from Financing Activities | 2.30 billion | 0.330 billion | Significantly increased | | Net Increase in Cash and Cash Equivalents | 1.628 billion | 0.852 billion | Increased | - The significant increase in net cash inflow from financing activities was primarily due to the receipt of the first installment of RMB 2.57 billion from the disposal of a 35.42% equity stake in Magang Limited[40] - At 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[41] - The company actively manages exchange rate and interest rate fluctuation risks by adhering to the principles of "cost locking, tool locking, exposure locking, and cash flow locking," and expands cross-border RMB business to mitigate exchange rate risks[42] 1. Key Operating Performance In H1 2025, the company focused on value creation, achieving a RMB 91 unit steel cost reduction, progress in product structure adjustment, and monthly profitability for Magang Limited through strategic reforms and synergies - In H1 2025, the Group produced 9.36 million tons of pig iron, 10.35 million tons of crude steel, and 9.63 million tons of steel products[26] H1 2025 Key Financial Data | Indicator | Amount (RMB) | | :--- | :--- | | Operating Revenue | 38.076 billion | | Net Profit Attributable to Shareholders | -0.075 billion | | Year-on-year Profit Increase | 1.07 billion | - In procurement, the iron ore segment's average spot purchase price outperformed the index by USD 4.58/ton, and the coking coal procurement cost was RMB 10.67/ton lower than the industry average[28] - In marketing, the proportion of key products was 35% and direct supply was 73.4%, increasing by 5.0 and 8.5 percentage points respectively compared to last year[28] - Through internal cost reduction and efficiency improvement in procurement and manufacturing, unit steel cost was reduced by RMB 91[28] - Settlement of key steel products reached 2.77 million tons, a 22% year-on-year increase; sales of new products reached 867,000 tons, with unit material excess gross profit increasing by 39% year-on-year[29] - Progress was made in the domestic production of high-speed train wheels, with autonomous wheels for Fuxing Hao EMU entering the China Railway Group supplier list and securing orders[29] - Maanshan Iron & Steel Co., Ltd. (Magang Limited) introduced Baosteel Co. as a strategic investor with a 49% stake, creating favorable conditions for deep synergistic development with Baosteel Co[30] - 172 supporting projects were jointly carried out with Baosteel Co., driving Magang Limited to achieve monthly profitability since its independent operation in March[32] - Changjiang Steel's hot metal cost decreased by 26%, and its self-generated power ratio increased by 18.62 percentage points, with unit steel external power cost decreasing by 22.97%[32] 2. H2 Situation and Tasks The company will proactively address a challenging H2 steel market by focusing on value creation, deepening accounting-based management, and strengthening synergistic value creation to avoid full-year losses - In H2, steel demand is expected to shift from weak to strong, and supply from strong to weak, with steel prices potentially showing a V-shaped trend for the full year; raw material prices may fluctuate downwards[33] - The company will focus on value creation, deepen accounting-based management, comprehensively benchmark for gaps, strengthen synergistic value creation, and intensify product structure adjustments, striving to achieve no losses for the full year[33] - Key tasks include: ensuring stable and smooth production (stabilizing blast furnaces, steel rolling, orders, equipment, and energy)[35] - Comprehensively deepening benchmarking to drive full-factor cost reduction and full-process quality improvement[35] - Closely monitoring both procurement and sales markets, with marketing focusing on structure adjustment, export increase, and channel optimization, and procurement emphasizing delayed purchasing, multiple batches, and small quantities[36] - Solidifying technological innovation support, focusing on product differentiation, structural adjustment, core breakthroughs, and industrial extension[37] - Promoting "three reductions and three enhancements": reducing ineffective assets, reducing debt and "two funds" (receivables and inventory) scale, enhancing overall labor productivity, increasing the proportion of bidding and direct procurement, and increasing the proportion of direct supply[39] 3. Cash Flow The Group's net increase in cash and cash equivalents was RMB 1.628 billion, with operating cash flow decreasing due to lower sales and increased notes receivable, while financing cash flow surged from the Magang Limited equity disposal Cash Flow Changes (H1 2025 vs. Prior Year Period) | Item | H1 2025 (RMB) | Prior Year Period (RMB) | Change | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 0.941 billion | 1.228 billion | Decreased by 0.287 billion | | Net Cash Outflow from Investing Activities | 1.620 billion | 0.704 billion | Increased by 0.916 billion | | Net Cash Inflow from Financing Activities | 2.30 billion | 0.330 billion | Significantly increased | | Net Increase in Cash and Cash Equivalents | 1.628 billion | 0.852 billion | Increased | - The decrease in net cash inflow from operating activities was mainly due to lower sales revenue, reduced cash inflow from sales of goods, and an increase in notes receivable[40] - The increase in net cash outflow from investing activities was mainly due to increased net cash outflow for the construction of long-term assets[40] - The increase in net cash inflow from financing activities was mainly due to the receipt of the first installment of RMB 2.57 billion from the disposal of a 35.42% equity stake in Magang Limited[40] 4. Financial Position and Exchange Rate Risk The Group's financial position is stable with an asset-liability ratio of 60.49% and ample bank credit, while exchange rate risks are actively managed through hedging strategies and RMB settlement Borrowing Structure (H1 2025) | Borrowing Type | Amount (RMB) | | :--- | :--- | | Short-term Borrowings | 13.181 billion | | Long-term Borrowings | 5.607 billion | | Long-term Borrowings Due Within One Year | 3.320 billion | | Total | 22.108 billion | | Fixed-rate Borrowings | 16.987 billion | | Floating-rate Borrowings | 5.121 billion | - At 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[41] - Banks' committed credit lines to the Group totaled approximately RMB 88.799 billion, of which approximately RMB 50.097 billion was unused[41] - The company actively manages exchange rate and interest rate fluctuation risks, adhering to the operating principles of "cost locking, tool locking, exposure locking, and cash flow locking," and mitigates exchange rate fluctuation risks through RMB settlement[42] 5. Internal Control and Risk Management The company maintains an effective internal control system covering all operations, with regular audit committee reviews confirming that all risks are under control, as evidenced by an unqualified audit opinion on financial reporting internal controls - The company implements an internal audit system and has established an internal control system covering the entire production and operation management process, including internal environment, risk assessment, and social responsibility[44] - The Audit Committee regularly reviews summaries and plans of internal audit work and deliberates on reports concerning anti-fraud efforts[44] - The Board confirmed that the company maintained effective internal controls in all material aspects for 2024, and Ernst & Young Hua Ming issued a standard unqualified internal control audit report[45] - The company's control measures for risks such as production safety, bulk raw material price fluctuations, exchange rate and interest rate fluctuations, cash flow management, environmental protection, and total energy consumption control are appropriate, and all risks are under control[45] III. Analysis of Core Competencies During the Reporting Period The company's core competitiveness stems from its integration into China Baowu's ecosystem, strategic geographical location, diversified high-value-added product structure, and proprietary technologies in key steel products, driving continuous innovation - The company actively integrates into China Baowu's ecosystem, achieving optimized resource allocation and efficiency through deep synergy, with the strategic investment of Baosteel Co. in Magang Limited showing initial synergistic effects[47] - Located in Maanshan City, Anhui Province, the company boasts a superior geographical location, close to rivers and the sea, with excellent transportation conditions, providing vast market space for development[48] - The company has formed a product structure of four major categories: "special steel, wheels and axles, long products, and plates," with diversified products shifting towards high-value-added items to enhance profitability[49] - The company possesses proprietary intellectual property and multiple core technologies in three product series: high-speed train wheels, H-beams, and cold heading steel, applying for 187 patents during the reporting period[50] - Autonomous wheels for CR400 Fuxing Hao EMU entered the China Railway Group supplier list; stable production and delivery of high-strength, high-toughness, hydrogen-embrittlement-resistant 2000MPa-grade hot-formed steel were achieved; and silicon steel products for drone drive motors were launched[50] IV. Key Operating Performance During the Reporting Period Operating revenue decreased by 11.47% due to lower steel prices, but operating costs decreased more significantly, leading to improved profitability, while cash flows were impacted by the Magang Limited equity transfer and asset-liability structure optimization Financial Statement Item Changes (H1 2025 vs. Prior Year Period) | Item | Change (%) | Primary Reason | | :--- | :--- | :--- | | Operating Revenue | -11.47 | Weak downstream demand, lower average steel prices | | Operating Cost | -14.69 | Full-process cost reduction and efficiency improvement, lower raw material prices | | Net Cash Flow from Operating Activities | -23.38 | Lower sales revenue, increased notes receivable | | Net Cash Flow from Investing Activities | N/A (Increased by 130.10%) | Increased cash paid for construction of fixed assets, intangible assets, and other long-term assets | | Net Cash Flow from Financing Activities | 596.76 | Baosteel Co. acquired equity in Magang Limited, received first installment of RMB 2.57 billion | | Other Income | 64.64 | VAT input tax additional deduction recognized | | Investment Income | -83.92 | Decreased investment income from associates and joint ventures | | Credit Impairment Losses | -158.67 | Increased provision for bad debts | | Gains on Disposal of Assets | -84.51 | Subsidiary recognized land acquisition gains in prior year | | Non-operating Income | 2,348.45 | Write-off of certain unpayable amounts | | Non-operating Expenses | 34.95 | Increased losses from disposal of fixed assets | | Income Tax Expense | -36.00 | Decreased income tax expense for Magang Transportation Materials and Cihu Processing | | Minority Interests Profit/Loss | N/A (Increased by RMB 0.282 billion) | Increased profitability of non-wholly owned subsidiaries year-on-year | | Operating Profit/(Loss), Total Profit/(Loss), Net Profit/(Loss), Net Loss Attributable to Parent Company Shareholders | N/A (Improved year-on-year) | Improved purchase-sale spread, cost reduction and quality improvement measures drove improved operating performance | - The significant increase in net cash inflow from financing activities was primarily due to the receipt of the first installment of RMB 2.57 billion from the disposal of a 35.42% equity stake in Magang Limited to Baosteel Co. for RMB 5.139 billion[55] - At the end of the reporting period, overseas assets amounted to RMB 0.922 billion, accounting for 1.12% of total assets[71] - At the end of the reporting period, the company's restricted assets totaled approximately RMB 1.731 billion, mainly comprising bank acceptance bill deposits and performance bond deposits[72] Overall Analysis of External Equity Investments | Indicator | Amount (Millions of RMB) | | :--- | :--- | | Company's Investment at Period-end | 19,618 | | Change in Investment Amount | 6,482 | | Percentage Change in Investment from Prior Year (%) | 49.35 | - The increase in investment amount this period was mainly due to capital injection into the subsidiary Magang Limited[75] - The company transferred a 35.42% equity stake in Magang Limited to Baosteel Co. for RMB 5.139 billion, with Baosteel Co. also injecting RMB 3.861 billion into Magang Limited. After the transaction, the company's stake in Magang Limited decreased from 100% to 51%, and Baosteel Co. holds 49%[85] - The introduction of Baosteel Co. into Magang Limited helps promote innovation in management and business models, enhance core competitiveness and overall strength, and achieve synergistic development with Baosteel Co[86] Key Financial Data of Major Controlled and Invested Companies (Millions of RMB) | Company Name | Company Type | Shareholding Ratio | Registered Capital | Total Assets | Net Assets | Operating Revenue | Operating Profit | Net Profit | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Maanshan Iron & Steel Co., Ltd. | Subsidiary | 51% | 1,266 | 61,188 | 14,952 | 31,840 | -6.79 | -62 | | Anhui Changjiang Steel Co., Ltd. | Subsidiary | 55% | 1,200 | 8,846 | 3,880 | 6,507 | 115 | 108 | | Magang (Australia) Co., Ltd. | Subsidiary | 100% | (Note 2) | 196 | 191 | 36.99 | 36.80 | 25.63 | | Shenglong Chemical Co., Ltd. | Associate | 31.99% | 568.8 | 7,489 | 4,139 | 2,251 | -79 | -91 | | Henan Jinma Energy Co., Ltd. | Associate | 26.89% | 535 | 10,571 | 4,186 | 4,143 | -137 | -139 | | Baowu Group Finance Co., Ltd. | Associate | 22.36% | 6,840 | 68,813 | 10,309 | 738 | 400 | 303 | | Ouyeel Industrial Products Co., Ltd. | Associate | 9.17% | 4,799 | 24,303 | 5,193 | 1,963 | 126 | 104 | | Linhuan Coking Co., Ltd. | Associate | 5.40% | 1,091 | 4,985 | 1,426 | 3,503 | -221 | -201 | - Magang Limited has achieved monthly profitability since its independent operation in March[89] (I) Analysis of Principal Business Operating revenue decreased by 11.47% due to lower steel prices, but operating costs decreased more significantly, leading to an improved net loss attributable to the parent, driven by better purchase-sale spread and cost reduction measures Financial Statement Item Changes (H1 2025 vs. Prior Year Period) | Item | Current Period Amount (RMB) | Prior Year Period Amount (RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 38,075,533,544 | 43,007,478,790 | -11.47 | | Operating Cost | 36,244,525,052 | 42,484,454,227 | -14.69 | | 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 | N/A | | 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 Losses | -9,568,661 | 16,310,120 | -158.67 | | Gains on Disposal of Assets | 11,386,204 | 73,529,933 | -84.51 | | Non-operating Income | 17,953,725 | 733,269 | 2,348.45 | | Non-operating Expenses | 12,837,349 | 9,512,675 | 34.95 | | Income Tax Expense | 77,493,175 | 121,089,148 | -36.00 | | Net Loss Attributable to Parent Company Shareholders | -74,780,316 | -1,144,779,937 | N/A | - The decrease in operating revenue was mainly due to the year-on-year decline in average steel prices affected by sustained weak demand in downstream industries[55] - The increase in net cash inflow from financing activities was mainly due to Baosteel Co.'s acquisition of a 35.42% equity stake in Magang Limited from Maanshan Iron & Steel Co. for RMB 5.139 billion, with the first installment of RMB 2.57 billion already received this period[55] - The year-on-year improvement in net loss attributable to parent company shareholders was mainly due to an improved purchase-sale spread and the company's efforts to continuously improve operating performance through accounting-based management, full-factor cost reduction, and full-process quality improvement measures[62] (II) Analysis of Assets and Liabilities Monetary funds, notes receivable financing, and other receivables significantly increased, while inventory decreased, and minority interests surged by 112.20% due to Baosteel Co.'s investment in Magang Limited Asset and Liability Status Changes (H1 2025 vs. End of Prior Year) | Item Name | Current Period-end Amount (RMB) | % of Total Assets | Prior Year-end Amount (RMB) | % of Total Assets | % Change from Prior Year-end | | :--- | :--- | :--- | :--- | :--- | :--- | | Monetary Funds | 8,436,274,044 | 10.25 | 6,434,105,447 | 8.15 | 31.12 | | Notes Receivable Financing | 2,585,459,712 | 3.14 | 1,382,456,994 | 1.75 | 87.02 | | Inventory | 7,126,202,291 | 8.66 | 7,908,952,095 | 10.02 | -9.90 | | Other Receivables | 3,010,330,626 | 3.66 | 544,731,735 | 0.69 | 452.63 | | Construction in Progress | 1,083,887,697 | 1.32 | 795,364,312 | 1.01 | 36.28 | | Minority Interests | 8,623,103,874 | 10.47 | 4,063,591,541 | 5.15 | 112.20 | - Monetary funds increased by 31.12%, mainly due to the company's transfer of a 35.42% equity stake in Magang Limited to Baosteel Co. and the receipt of the first installment of RMB 2.57 billion from the equity transfer this period[67] - Other receivables increased by 452.63%, mainly because the second installment of RMB 2.57 billion from the Magang Limited equity transfer was recognized as other receivables[67] - Overseas assets amounted to RMB 0.922 billion, accounting for 1.12% of total assets[71] - At the end of the reporting period, the company's restricted assets totaled approximately RMB 1.731 billion, mainly comprising bank acceptance bill deposits and performance bond deposits[72] (III) Analysis of Investment Status Total external equity investment increased by 49.35% due to capital injection into Magang Limited, with significant non-equity investments in product quality, environmental protection, and technological transformation projects progressing towards completion Overall Analysis of External Equity Investments | Indicator | Amount (Millions of RMB) | | :--- | :--- | | Company's Investment at Period-end | 19,618 | | Change in Investment Amount | 6,482 | | Percentage Change in Investment from Prior Year (%) | 49.35 | - The increase in investment amount this period was mainly due to capital injection into the subsidiary Magang Limited[75] Major Non-equity Investment Projects | Project Name | Total Budgeted Investment (Millions of RMB) | New Investment in Reporting Period (Millions of RMB) | Project Progress | | :--- | :--- | :--- | :--- | | Product Quality Projects | 12,298 | 363 | 4% | | Energy Saving and Environmental Protection Projects | 3,499 | 134 | 4% | | Technological Transformation Projects | 3,237 | 397 | 17% | | Total | N/A | 968 | N/A | Major Engineering Projects | Project Name | Planned Investment Amount (Millions of RMB) | Project Progress | | :--- | :--- | :--- | | New Special Steel Project | 8,457 | Phase I completed, Phase II feasibility study adjusted | | Magang Cold Rolling Product Structure Adjustment – New 6 Galvanized Line Project | 895 | Civil works, steel structure, equipment installation | | Magang South Area Section Steel Renovation Project - 3 Continuous Casting Machine Project | 534 | Civil works, steel structure construction | | Magang North Area Phase III Gas Power Generation Project | 370 | Civil works construction | | Changjiang Steel Bar Near-Net-Shape Casting and Rolling Integration Upgrade Project | 105 | Plant steel structure, equipment foundation construction | | Total | 10,361 | ╱ | (IV) Major Asset and Equity Disposals The company completed the transfer of a 35.42% equity stake in Magang Limited to Baosteel Co. for RMB 5.139 billion, reducing its stake to 51% and promoting synergistic development - The company transferred a 35.42% equity stake in Magang Limited to Baosteel Co. for RMB 5.139 billion[85] - Baosteel Co. injected RMB 3.861 billion in cash into Magang Limited, and the company waived its right to subscribe for this capital increase[85] - The equity transfer was completed on June 30, 2025, reducing the company's stake in Magang Limited from 100% to 51%, with Baosteel Co. holding 49%[85] - This transaction helps promote innovation in Magang Limited's management and business models, enhance its core competitiveness and overall strength, and achieve synergistic development with Baosteel Co[86] (V) Analysis of Major Controlled and Invested Companies This section provides an overview of the company's major controlled and invested companies, highlighting Magang Limited's monthly profitability since Baosteel Co.'s strategic investment Key Financial Data of Major Controlled and Invested Companies (Millions of RMB) | Company Name | Company Type | Shareholding Ratio | Registered Capital | Total Assets | Net Assets | Operating Revenue | Operating Profit | Net Profit | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Maanshan Iron & Steel Co., Ltd. | Subsidiary | 51% | 1,266 | 61,188 | 14,952 | 31,840 | -6.79 | -62 | | Anhui Changjiang Steel Co., Ltd. | Subsidiary | 55% | 1,200 | 8,846 | 3,880 | 6,507 | 115 | 108 | | Magang (Australia) Co., Ltd. | Subsidiary | 100% | (Note 2) | 196 | 191 | 36.99 | 36.80 | 25.63 | | Shenglong Chemical Co., Ltd. | Associate | 31.99% | 568.8 | 7,489 | 4,139 | 2,251 | -79 | -91 | | Henan Jinma Energy Co., Ltd. | Associate | 26.89% | 535 | 10,571 | 4,186 | 4,143 | -137 | -139 | | Baowu Group Finance Co., Ltd. | Associate | 22.36% | 6,840 | 68,813 | 10,309 | 738 | 400 | 303 | | Ouyeel Industrial Products Co., Ltd. | Associate | 9.17% | 4,799 | 24,303 | 5,193 | 1,963 | 126 | 104 | | Linhuan Coking Co., Ltd. | Associate | 5.40% | 1,091 | 4,985 | 1,426 | 3,503 | -221 | -201 | - Magang Limited has achieved monthly profitability since its independent operation in March[89] - During the reporting period, Anhui Changjiang Steel Trading Hefei Co., Ltd. was absorbed and merged by Changjiang Steel, a subsidiary, and is no longer included in the consolidation scope[91] V. Other Disclosures The company faces operational, safety, environmental, and "two funds" management risks, with corresponding control measures, and has significantly improved operating performance in H1 through strategic initiatives and technological innovation - The company may face major risks including operational risks, safety (production, network) risks, environmental protection risks, and "two funds" management risks[92] - Operational risk control measures include reducing debt and "two funds" scale, promoting "three reductions and three enhancements," managing operating risks of invested companies, and improving overall labor productivity[93] - Safety risk prevention and control include special rectification for engineering machinery use safety, integrating and optimizing safety management systems, and continuously enhancing network and data security protection capabilities[93] - Environmental protection risk prevention and control include continuous monitoring of environmental protection binding indicators and preparing for inclusion in the carbon market[93] - On August 15, 2025, Mr. Zhang Wenyang resigned from his positions as company director, general manager, and financial officer, and the Board appointed Mr. Chen Guorong as deputy general manager and financial officer[93] - The company complies with the HKEX Corporate Governance Code and the Model Code for Securities Transactions by Directors of Listed Issuers[95] - Implementation of the "Quality Improvement, Efficiency Enhancement, and Return Focus" action plan: H1 achieved a total profit of RMB 0.118 billion and net profit attributable to listed company shareholders of RMB -0.075 billion, with significantly improved operating performance[95] - The company introduced a strategic investor by transferring part of Magang Limited's equity to Baosteel Co. and increasing capital, promoting synergistic development[95] - The controlling shareholder, Magang Group, cumulatively increased its holdings of the company's A-shares by 68,927,534 shares from September to November 2024, accounting for approximately 0.890% of total share capital[96] - The company's cumulative dividend payout since listing accounts for approximately 56% of cumulative net profit, and it will balance the continuity and stability of cash dividends in the future[96] - The company highly values Environmental, Social, and Governance (ESG), and has been continuously selected for lists such as the SASAC "Central SOE ESG Pioneer 100 Index"[96] (I) Potential Risks The company faces operational, safety, environmental protection, and "two funds" management risks, for which it has developed and implemented corresponding control measures - The company may face major risks including operational risks, safety (production, network) risks, environmental protection risks, and "two funds" management risks[92] - Operational risk control measures include reducing debt and "two funds" scale, promoting "three reductions and three enhancements," managing operating risks of invested companies, and improving overall labor productivity[93] - Safety risk prevention and control include special rectification for engineering machinery use safety, integrating and optimizing safety management systems, and continuously enhancing network and data security protection capabilities[93] - Environmental protection risk prevention and control include continuous monitoring of environmental protection binding indicators and preparing for inclusion in the carbon market[93] (II) Other Disclosures The Audit Committee reviewed H1 performance, a change in financial leadership occurred, no listed shares were repurchased, and the company complied with governance codes, while actively implementing strategic plans for improved performance, technological innovation, and ESG - The Audit Committee has reviewed the H1 2025 performance[93] - On August 15, 2025, Mr. Zhang Wenyang resigned from his positions as company director, general manager, and financial officer, and the Board appointed Mr. Chen Guorong as deputy general manager and financial officer[93] - During the reporting period, the company did not redeem, purchase, or resell any listed shares[93] - The company complies with the HKEX Corporate Governance Code and the Model Code for Securities Transactions by Directors of Listed Issuers[95] - Implementation of the "Quality Improvement, Efficiency Enhancement, and Return Focus" action plan: H1 achieved a total profit of RMB 0.118 billion and net profit attributable to listed company shareholders of RMB -0.075 billion, with significantly improved operating performance[95] - The company introduced a strategic investor by transferring part of Magang Limited's equity to Baosteel Co. and increasing capital, promoting synergistic development[95] - The controlling shareholder, Magang Group, cumulatively increased its holdings of the company's A-shares by 68,927,534 shares from September to November 2024, accounting for approximately 0.890% of total share capital[96] - The company's cumulative dividend payout since listing accounts for approximately 56% of cumulative net profit, and it will balance the continuity and stability of cash dividends in the future[96] - The company highly values Environmental, Social, and Governance (ESG), and has been continuously selected for lists such as the SASAC "Central SOE ESG Pioneer 100 Index"[96] Section IV Corporate Governance, Environment, and Society This section details changes in the company's governance, its environmental information disclosure, and its efforts in rural revitalization and poverty alleviation I. Changes in Directors, Supervisors, and Senior Management While no changes occurred during the reporting period, Mr. Zhang Wenyang resigned as director, general manager, and financial officer on August 15, 2025, with Mr. Chen Guorong appointed as his successor in financial roles - During the reporting period, there were no changes in the company's directors, supervisors, or senior management[98] - On August 15, 2025, Mr. Zhang Wenyang resigned from his positions as company director, general manager, and financial officer[98] - The Board appointed Mr. Chen Guorong as deputy general manager and financial officer[98] II. Profit Distribution or Capital Reserve Conversion Plan The company did not propose any profit distribution or capital reserve to share capital conversion plan for this semi-annual period - The company did not propose any profit distribution or capital reserve to share capital conversion plan for this semi-annual period[99] III. Status and Impact of Company Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures The company has a repurchase and cancellation of restricted A-shares, with relevant progress disclosed in interim announcements - The company has a repurchase and cancellation of restricted A-shares, with relevant information disclosed in interim announcements[100] IV. Environmental Information of Listed Companies and Their Major Subsidiaries Included in the List of Enterprises Required to Disclose Environmental Information by Law The company and its six major subsidiaries are included in the list of enterprises required to disclose environmental information by law, with reports accessible on the Enterprise Environmental Information Disclosure System (Anhui) - The company and its six major subsidiaries are included in the list of enterprises required to disclose environmental information by law[102][104] - Environmental information disclosure reports can be accessed on the Enterprise Environmental Information Disclosure System (Anhui)[102] V. Specific Progress in Consolidating Poverty Alleviation Achievements and Rural Revitalization The company actively supports rural revitalization through organizational leadership, funding for agricultural projects, compensated assistance, infrastructure development, and educational initiatives to cultivate technical talents - Company leaders and relevant departments visited the assisted village to conduct rural revitalization research and completed the 2025 external donation budget approval, ensuring financial support[102] - The company applied for RMB 400,000 in assistance funds for the fresh corn planting and processing industry project in Liji Village, providing technical support and introducing investment and operating entities[103] - The company participated in "group-based assistance," prioritizing compliant procurement of ton bags from assisted areas through the Ouyeel Industrial Products platform, with direct procurement and sales of ton bags reaching RMB 842,600 in H1[106] - The company allocated RMB 70,000 in donation assistance funds for the installation of new road streetlights in Liji Village and donated RMB 30,000 for the operation and material replenishment of the "Points Supermarket"[107][108] - The company formulated the 2025 consumption assistance work plan and organized the completion of procurement bidding for consumption assistance goods and services operators, directly procuring RMB 2.6058 million worth of products from designated assisted villages[109] - The company plans to leverage the educational resources of Magang Technician College to conduct "order-based schooling" through government-school cooperation, assisting Funan County in cultivating technical talents[110] Section V Significant Matters This section covers the company's fulfillment of commitments, absence of irregular financial activities, audit status, and significant related-party transactions I. Fulfillment of Commitments China Baowu's 2019 commitments to avoid horizontal competition, regulate