Valin Steel(SZ:000932) Sou Hu Cai Jing·2025-08-26 09:32Core Viewpoint - Company reported significant improvement in performance for the first half of 2025, particularly in Q2, exceeding market expectations due to lower raw material prices, operational efficiency, and stable competition in high-end steel products [2][11]. Financial Performance - Company achieved a total revenue of 630.92 billion yuan in H1 2025, a decrease of 16.93% year-on-year, while net profit attributable to shareholders rose by 31.31% to 17.48 billion yuan [11]. - In Q2 2025, revenue was 328.63 billion yuan, down 15.52% year-on-year, but net profit increased by 26.22% to 11.86 billion yuan [11]. Operational Insights - The improvement in profitability was attributed to three main factors: significant decline in raw material prices compared to steel prices, elimination of short-term disruptions from the previous year, and effective cost management across production bases [2]. - The company maintains a direct supply model for specialty steel, with pricing determined 1-2 months in advance based on raw material costs and customer requirements [3]. Market Outlook - The third quarter is traditionally a slow season, with a decline in demand for thin plate products, while demand for VM automotive plates showed improvement [4]. - The company anticipates that industry profitability may narrow in Q3 due to rising raw material costs, particularly for coking coal, which has increased more than steel prices [4]. Export Strategy - The company plans to enhance its overseas presence, particularly in the Middle East and Europe, despite challenges posed by anti-dumping measures affecting "buy order" exports [5]. Regulatory Compliance - The company has applied for "leading normative enterprise" status under the 2025 Steel Industry Normative Conditions, which aims to promote high-quality development in the industry [5][6]. Production Guidance - In H1 2025, the company sold 11.1 million tons of steel, a decrease of 12.6% year-on-year, and expects to adjust production based on downstream demand and profitability [6]. Project Developments - The company has made progress in its silicon steel projects, with the first production line for non-oriented silicon steel expected to meet demand from key customers starting January 2025 [8]. Tax and Financial Strategy - Other income decreased due to changes in tax policies affecting advanced manufacturing VAT rebates, while the company continues to benefit from a 15% corporate income tax rate for high-tech enterprises [9]. - The company plans capital expenditures of 5.467 billion yuan in 2025, focusing on product structure upgrades and low-emission projects, with a cash dividend ratio expected to increase in the future [10].