CITIC Steel(SZ:000708) GOLDEN SUN SECURITIES·2025-04-19 12:59Investment Rating - The report maintains a "Buy" rating for the company, citing its leading position in the special steel industry and improving capacity integration capabilities [3][5]. Core Views - The company reported a year-on-year increase in net profit for Q1 2025, with a net profit of 1.384 billion yuan, reflecting a 1.76% increase [1]. - The demand for special steel is expected to grow in the long term due to favorable manufacturing policies and the maturation of the steel industry [1]. - The company aims to achieve a steel production target of 18.6 million tons and an export target of 2.65 million tons in 2025, representing a 20.3% year-on-year increase [2]. Financial Performance - In Q1 2025, the company achieved operating revenue of 26.84 billion yuan, a decrease of 5.59% year-on-year, while the gross profit margin showed signs of improvement [1]. - The company's quarterly sales gross profit margins for 2024Q2 to 2025Q1 were 12.30%, 12.51%, 14.39%, and 13.82%, respectively [1]. - The projected net profits for 2025 to 2027 are 5.449 billion yuan, 5.969 billion yuan, and 6.305 billion yuan, with corresponding P/E ratios of 10.8, 9.9, and 9.4 [3][4]. Sales and Production - The company’s sales volume for high-end products, particularly bearing steel and automotive steel, has shown significant growth, with automotive steel sales increasing by 38% year-on-year [2]. - The export sales volume for 2024 was 2.202 million tons, with an export product gross margin of 19.06%, which is 7.12 percentage points higher than domestic products [2]. Market Outlook - The long-term outlook for the special steel industry is positive, supported by the ongoing demand from downstream manufacturing sectors and government policies [1][3].