MAS C.L.(600808) 华泰证券·2024-12-26 09:40Investment Rating - The report maintains a "Hold" rating for the company A/H with a target price of 3.02 RMB and 1.48 HKD [2][39]. Core Views - The company is positioned as a core strength in special long materials and an important player in plate and strip materials within the China Baowu Steel Group. The company has a total production capacity of 20.5 million tons as of the end of 2023 [18][37]. - The steel industry has faced downward pressure on prices due to declining domestic demand since 2024, with the decline in prices outpacing that of raw materials, leading to industry-wide profit compression. The company reported a total loss of 2.535 billion RMB in the first three quarters of 2024 [7][59]. - The recovery of industry profits is seen as a key factor for the company's performance turnaround, with expectations for improved profitability in 2025-2026 due to potential policy implementations and demand stimulation [7][37]. Summary by Sections Financial Forecasts - The company is projected to have a net profit attributable to shareholders of -2.897 billion RMB in 2024, followed by a profit of 93.44 million RMB in 2025 and 1.179 billion RMB in 2026. The corresponding EPS is expected to be -0.37 RMB, 0.01 RMB, and 0.15 RMB respectively [2][8]. - Revenue forecasts indicate a decline from 98.938 billion RMB in 2023 to 84.144 billion RMB in 2024, with further decreases to 81.326 billion RMB in 2025 and 80.165 billion RMB in 2026 [8][64]. Production and Sales - The company expects to maintain steel production and sales at 20.28 million tons from 2024 to 2026, reflecting historical consistency in production and sales volumes [5]. - The company’s product lines include long materials such as rebar and wire rods, and flat products like hot-rolled and cold-rolled sheets, with production figures for 2023 being 1.03 million tons for long materials and 0.942 million tons for flat products [18][58]. Market Conditions - The report highlights that the average gross margin for major steel products in China has been in a loss state throughout 2024, with long material prices down by an average of 8.81% and flat material prices down by 10.10% year-on-year [7][59]. - The report anticipates that if supply-side policies are effectively implemented, steel prices may stabilize in 2025-2026, with iron ore prices expected to decline more than steel prices, potentially improving industry profitability [7][43][61].