Wujin Stainless(SH:603878) Zheng Quan Zhi Xing·2025-06-30 16:21Core Viewpoint - The credit rating report for Jiangsu Wujin Stainless Steel Co., Ltd. indicates a stable outlook, reflecting the company's strong position as a major supplier of industrial stainless steel pipes in China, despite challenges in the petrochemical sector affecting revenue [2][4]. Company Overview - Jiangsu Wujin Stainless Steel Co., Ltd. is a leading supplier of industrial stainless steel pipes in China, with stable relationships with major clients such as Sinopec and PetroChina [4][11]. - The company has achieved significant certifications, including those from Saudi Aramco, enhancing its brand strength and international sales [4][14]. Financial Performance - The company's total assets as of March 2025 were 40.83 billion, with equity attributable to shareholders at 26.28 billion [2][3]. - Revenue for 2024 is projected to decline significantly, with a year-on-year decrease of 54.34% in the petrochemical sector, leading to a total revenue of 4.83 billion [3][21]. - The net profit for the first quarter of 2025 was 0.30 billion, down from 1.26 billion in the same period of 2024 [3][21]. Market Environment - The stainless steel pipe industry in China is characterized by ample capacity, with the petrochemical sector being the primary consumer, although demand has weakened since 2024 [10][11]. - The company faces competition from both domestic and international players, with a low industry concentration and varying regional demands [10][11]. Operational Challenges - High inventory levels pose operational challenges, necessitating effective inventory management and increased working capital requirements [4][5]. - The company has a significant reliance on raw materials, with stainless steel round bars and plates constituting over 70% and 80% of production costs for seamless and welded pipes, respectively [18][19]. Future Outlook - The credit rating agency maintains a stable outlook for the company, anticipating steady demand in the boiler and nuclear power sectors, despite current challenges in the petrochemical industry [4][6]. - The company is actively expanding its presence in international markets, particularly in the Middle East and South America, with a projected 56.82% increase in foreign sales [21].