CITIC Steel(SZ:000708) Orient Securities·2025-08-26 02:26Investment Rating - The investment rating for the company is "Buy" with a target price of 15.4 CNY, maintaining the rating from previous assessments [4][6]. Core Views - The company is expected to benefit from increasing demand for special steel, particularly in the energy sector, which will enhance its profitability. The company has optimized its product structure and focused on strategic areas such as wind power, oil and gas, and new energy vehicles, leading to a 2.67% year-on-year increase in net profit for the first half of 2025 [10]. - The special steel market is anticipated to continue growing, with the company positioned to expand its profit margins due to its strong technical capabilities and product offerings in clean energy sectors like hydropower and nuclear power [10]. - The company has a solid dividend policy, with a cash dividend payout of 25.6 billion CNY for 2024, representing 49.95% of its net profit, indicating a high dividend yield of 4.45% [10]. Financial Performance Summary - The company's revenue for 2023 is projected at 114,019 million CNY, with a year-on-year growth of 15.9%. However, a decline of 4.2% is expected in 2024, followed by a slight decrease in subsequent years [14]. - The net profit attributable to the parent company is forecasted to be 5,721 million CNY in 2023, with a decrease of 19.5% year-on-year. The profit is expected to recover with an 8.5% increase in 2025 [14]. - The earnings per share (EPS) are estimated to be 1.13 CNY for 2023, with a slight decline to 1.02 CNY in 2024, and a recovery to 1.10 CNY in 2025 [14]. Valuation Metrics - The company is valued at a price-to-earnings (PE) ratio of 11.3 for 2023, which is expected to rise to 12.6 in 2024 before stabilizing around 11.6 in 2025 [14]. - The price-to-book (PB) ratio is projected to decrease from 1.7 in 2023 to 1.5 in 2025, indicating a potential increase in shareholder value over the forecast period [14].