Minsheng Securities·2025-07-06 02:27Investment Rating - The report maintains a "Buy" recommendation for several companies in the steel sector, including Baosteel, Hualing Steel, and Nanjing Steel, among others [3][4]. Core Insights - The report indicates a release of "anti-involution" signals, reigniting expectations for supply-side reforms. The central financial committee has emphasized the need to regulate low-price competition and promote the orderly exit of outdated production capacity [3][8]. - Steel prices have increased, with notable rises in various categories, such as rebar and cold-rolled steel, reflecting a positive trend in the market [1][9]. - The report highlights an increase in steel production and a decrease in total inventory, suggesting a tightening supply situation [2][6]. Summary by Sections Price Trends - As of July 4, 2025, the price of 20mm HRB400 rebar in Shanghai is 3180 CNY/ton, up 90 CNY/ton from the previous week. Other steel products also saw price increases, with cold-rolled steel rising by 120 CNY/ton [1][9]. Production and Inventory - The total production of the five major steel categories reached 8.85 million tons, an increase of 41,700 tons week-on-week. Total inventory decreased, with social inventory rising by 96,600 tons to 9.148 million tons, while steel mill inventory fell by 97,200 tons [2][6]. Profitability - Steel profits have risen, with estimated gross margins for rebar, hot-rolled, and cold-rolled steel increasing by 45 CNY/ton, 18 CNY/ton, and 40 CNY/ton, respectively [1][3]. Investment Recommendations - The report recommends several companies for investment: - For the general steel sector: Baosteel, Hualing Steel, Nanjing Steel - For special steel: Xianglou New Materials, CITIC Special Steel, Yongjin Co. - For pipe materials: Jiuli Special Materials, Youfa Group, Wujin Stainless Steel - Additionally, it suggests paying attention to high-temperature alloy stocks like Fushun Special Steel [3][4]. Key Company Forecasts - The report provides earnings per share (EPS) and price-to-earnings (PE) ratios for key companies, indicating a positive outlook for most, with Baosteel's PE ratio projected to decrease from 21 in 2024 to 14 in 2026 [3][4].