Core Viewpoint - The report from Guotai Junan maintains an "overweight" rating for Shougang Resources (00639), forecasting a decline in revenue and net profit for the first half of 2025 due to downstream demand affecting coking coal prices [1] Group 1: Financial Performance - In H1 2025, the company achieved total revenue of HKD 2.101 billion, a decrease of 17% year-on-year, and a net profit attributable to shareholders of HKD 404 million, down 52% year-on-year [1] - The net profit forecasts for 2025-2027 have been revised down to HKD 769 million, HKD 985 million, and HKD 1.261 billion respectively [1] Group 2: Production and Sales - The company reported a raw coking coal production of approximately 2.64 million tons in H1 2025, an increase of 17.3%, and a premium coking coal production of approximately 1.54 million tons, up 19.4% [2] - Total sales of premium coking coal reached 2.12 million tons, a significant increase of 58%, with self-produced premium coking coal sales at 1.55 million tons, up 15.7%, and trade premium coking coal sales at 570,000 tons [2] - The average selling price of premium coking coal fell by 45% year-on-year to RMB 1,067 per ton due to increased supply and limited demand [2] Group 3: Cost Optimization - The production cost of raw coking coal in H1 2025 was RMB 328 per ton, an increase of 27.6%, while cash production costs decreased by 30.7% to RMB 185 per ton [3] - Depreciation and amortization costs were RMB 87 per ton, down 9.4%, and resource tax and other related taxes were RMB 56 per ton, down 37.8% [3] - The processing cost of premium coking coal was RMB 44 per ton, a decrease of 12% [3] Group 4: Dividend Policy - The company maintained a high dividend strategy with a 100% payout ratio for the full year of 2024 and a 75% payout ratio for H1 2025, distributing HKD 0.06 per share [4] - As of H1 2025, the company had cash reserves of HKD 6.88 billion, ensuring the sustainability of its high dividend rate [4]