Baosteel(SH:600019) HTSC·2025-04-29 02:33Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of 7.98 RMB [5][8]. Core Views - The company reported a revenue of 322.12 billion RMB in 2024, a year-on-year decrease of 6.60%, and a net profit attributable to shareholders of 7.36 billion RMB, down 38.36% year-on-year, primarily due to weak industry conditions [1][2]. - In Q1 2025, the company achieved a revenue of 72.88 billion RMB, a year-on-year decrease of 9.82% and a quarter-on-quarter decrease of 8.05%, with a net profit of 2.43 billion RMB, reflecting a year-on-year increase of 26.37% and a quarter-on-quarter increase of 64.49% [1][3]. - The steel industry is expected to undergo supply-side optimization, which may lead to a recovery in industry profits, benefiting the company as a leading player in the sector [4]. Summary by Sections Financial Performance - The company's steel product output and sales for 2024 were 51.41 million tons and 51.59 million tons, respectively, with a year-on-year decrease of 1.0% and 0.6% [2]. - The average selling price of steel products was 4,056 RMB per ton (excluding tax), down 6.9% year-on-year [2]. - The gross profit margin, expense ratio, and net profit margin for 2024 were 5.45%, 3.34%, and 2.66%, respectively, with year-on-year changes of -0.75, +0.3, and -1.33 percentage points [2]. Industry Outlook - The steel industry faced significant oversupply in 2024, with the average sales profit margin for key enterprises at 0.71%, down 0.63 percentage points year-on-year [4]. - Government measures to control steel production and prevent excessive competition indicate a potential restart of supply-side optimization [4]. - The global iron ore production capacity is expected to continue expanding in 2025, which may lead to a further decline in iron ore prices and a recovery in steel industry profits [4]. Earnings Forecast - The company’s earnings per share (EPS) for 2025-2027 are projected to be 0.43, 0.56, and 0.65 RMB, with adjustments reflecting a 13% decrease and a 5% increase for 2025-2026 compared to previous estimates [5]. - The book value per share (BVPS) for 2025-2026 is estimated at 9.40 and 9.53 RMB, respectively [5]. - The target price of 7.98 RMB is based on an average price-to-book (PB) ratio of 0.84X since 2017 [5].