BSGCO(SZ:000959) Xin Lang Cai Jing·2025-08-15 08:29Core Viewpoint - The company is expected to achieve a significant year-on-year increase in net profit attributable to shareholders in the first half of 2025, driven by improved product structure and declining depreciation expenses, alongside a favorable industry supply-demand dynamic [1][2]. Financial Performance - The company forecasts a net profit attributable to shareholders of 642-672 million yuan for the first half of 2025, representing a year-on-year growth of 62.62%-70.22% [2]. - The increase in performance is attributed to a decline in raw material prices, which has outpaced the drop in steel prices, leading to overall industry profit expansion [2]. - The net profit forecasts for 2025-2026 have been raised to 1.522 billion and 1.712 billion yuan, respectively, with an additional forecast of 1.884 billion yuan for 2027, corresponding to EPS of 0.20, 0.22, and 0.24 yuan [2]. Product Strategy - The company is focusing on optimizing its product structure, with electrical steel, automotive sheets, and tinplate identified as its three strategic products, which have higher added value [2]. - In 2024, the total production of these three strategic products is expected to reach 7.07 million tons, a year-on-year increase of 10.90%, accounting for 30.35% of total production, up 2.84 percentage points year-on-year [2]. - The company plans to develop medium-thick plates as its fourth strategic product, aiming to increase production volume and optimize the product structure, which is anticipated to become a new profit growth driver [2]. Cost Structure - The company's depreciation and amortization expenses for 2024 are projected to be 8.036 billion yuan, constituting 7.42% of operating revenue, which is relatively high in the industry [3]. - The high depreciation is due to the establishment of new steel plants and investments in low-emission upgrades and intelligent production lines, but some equipment is reaching the end of its depreciation period, suggesting a gradual decrease in these expenses in the future [3]. Industry Outlook - The industry supply-demand dynamics are expected to improve, with a stabilization in steel demand anticipated as the negative impact from the real estate sector diminishes [3]. - The National Development and Reform Commission has indicated that it will continue to implement crude steel production controls through 2025, promoting consolidation in the steel industry, which is expected to lead to long-term profit recovery [3].