CITIC Steel(000708) 民生证券·2024-10-27 15:05Investment Rating - The report maintains a "Recommended" rating for the company with a target price of 12.60 CNY [2]. Core Views - The company's Q3 performance faced pressure, with revenue decreasing by 3.4% year-on-year and net profit attributable to shareholders dropping by 10.7% [2]. - The gross profit margin has declined by 1.29 percentage points year-on-year, with Q3 gross profit margin at 12.51% [2]. - The company is focusing on optimizing its product structure, with a notable increase in other income, which reached 7.58 billion CNY for the first three quarters of 2024 [2]. - Future core highlights include steady growth in special steel demand and resilience through high-end product development [2]. Summary by Sections Financial Performance - For Q3 2024, the company reported a revenue of 835.04 billion CNY, a decrease of 18.7% year-on-year, and a net profit of 38.36 billion CNY, down 10.7% [2]. - The company’s operating income for 2024 is projected to be 110.77 billion CNY, reflecting a decline of 2.8% compared to 2023 [3]. - The net profit attributable to shareholders is expected to be 5.13 billion CNY in 2024, a decrease of 10.3% from 2023 [3]. Profitability and Efficiency - The report indicates that the company’s gross margin is projected to be 12.40% in 2024, down from 13.14% in 2023 [3]. - The company has maintained stable operating expenses, with a slight increase of 0.75 billion CNY in the first three quarters of 2024 [2]. Market Outlook - The demand for special steel is expected to grow steadily, driven by advancements in high-end applications and intelligent manufacturing [2]. - The company is focusing on high-end products, which are anticipated to enhance its resilience against market fluctuations [2]. Earnings Forecast - The projected net profit for the company for 2024-2026 is expected to be 5.13 billion CNY, 5.75 billion CNY, and 6.36 billion CNY respectively [3]. - The report forecasts a PE ratio of 12x for 2024, indicating a cautious outlook on earnings growth [2].