CITIC Steel(000708)2024-10-29 03:11Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook compared to market performance [5][7]. Core Views - The company reported Q3 2024 results that met market expectations, with total revenue of 83.504 billion yuan, a year-on-year decrease of 3.37%, and a net profit attributable to shareholders of 3.836 billion yuan, down 12.3% year-on-year [5][6]. - Despite a significant decline in industry conditions and steel prices, the company's gross margin remained relatively stable due to its specialty steel business, which demonstrated strong anti-cyclical characteristics [6][7]. - The company anticipates growth in high-end product sales, with a focus on optimizing product structure to mitigate the impact of mid-range product profit fluctuations [7]. Summary by Sections Financial Performance - For Q3 2024, the company experienced a revenue decline of 7.27% quarter-on-quarter, but the gross margin slightly improved to 12.51% from 12.3% in Q2 [6]. - The company’s total revenue for 2024 is projected at 111.829 billion yuan, with a year-on-year growth rate of -1.9% [9]. - The net profit for 2024 is forecasted to be 5.168 billion yuan, reflecting a year-on-year decrease of 9.7% [9]. Market Conditions - The report highlights a significant downturn in the steel industry, with average prices for hot-rolled and cold-rolled sheets dropping by 11.98% and 11.08% respectively in Q3 2024 [6]. - The overall profit for the black metal and rolling processing industry turned negative, indicating substantial pressure on the sector [6]. Product Strategy - The company’s high-end product sales are expected to grow, with a 24% increase in sales of "two highs and one special" products in H1 2024 [7]. - The focus on high-end products is anticipated to enhance the company's product mix and reduce reliance on mid-range products, which are more susceptible to profit volatility [7].