Valin Steel(SZ:000932) Xin Lang Cai Jing·2025-08-22 00:31Core Viewpoint - The company reported a significant improvement in profitability for 1H25, driven by enhanced steel business performance despite a decline in revenue and sales volume [1][2]. Financial Performance - 1H25 revenue was 63.092 billion yuan, down 16.9% year-on-year; net profit attributable to shareholders was 1.748 billion yuan, up 31.31% year-on-year [1]. - In Q2, revenue was 32.719 billion yuan, down 15.58% year-on-year; net profit attributable to shareholders was 1.186 billion yuan, up 26.22% year-on-year [1]. - Steel sales volume in 1H25 was 11 million tons, down 5.9% year-on-year, primarily due to high furnace maintenance in Q1 [2]. - The average selling price of steel per ton was 4,273 yuan, with a gross profit of 479 yuan and a net profit of 159 yuan per ton, showing a year-on-year decrease in selling price but an increase in gross and net profit per ton [2]. Cost Management and Efficiency - The company maintained good expense control, with total expenses per ton of steel at 94 yuan, a slight increase year-on-year [2]. - Financial expenses per ton decreased by 1.2 yuan, down 9.4% year-on-year, due to a reduction in interest-bearing debt [2]. - The effective tax rate in Q2 was 17%, showing a significant decrease from Q1 [2]. Product Development and Market Position - The company has shown strong product competitiveness, with key product sales accounting for 68.5% of total sales in 1H25, an increase of 3.9% year-on-year [3]. - The company developed 75 new products, including high-strength galvanized products, which saw a sales increase of 97.7% year-on-year [3]. - A strategic partnership with Anmi Group was established to enhance the company's high-end steel product competitiveness [3]. Profit Forecast and Valuation - The company maintains its profit forecast for 25e/26e, with a current stock price corresponding to a P/E ratio of 9.5/7.9x for 25/26e [4]. - The target price remains at 7.0 yuan, implying a potential upside of 22% [4].