CITIC Steel(SZ:000708) Orient Securities·2025-08-26 02:42Investment Rating - The report maintains a "Buy" rating for the company with a target price of 15.4 CNY, based on a PE valuation of 14X for comparable companies [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 report highlights a 2.67% year-on-year increase in net profit for the first half of 2025, reaching 2.798 billion CNY [10]. - The company is focusing on optimizing its product structure and targeting strategic sectors such as energy and automotive, which is anticipated to sustain its growth trajectory [10]. - The report emphasizes the company's strong dividend policy, with a proposed cash dividend of 2.56 billion CNY for 2024, representing 49.95% of its net profit, indicating a high dividend yield of 4.45% [10]. Financial Performance Summary - Revenue projections for 2025-2027 are adjusted to 104.795 billion CNY, 104.011 billion CNY, and 104.157 billion CNY, respectively, reflecting a decline in revenue growth rates [4][14]. - The company's net profit for 2025 is forecasted at 5.563 billion CNY, with a growth rate of 8.5% compared to the previous year [4][14]. - The report anticipates an increase in gross margin from 12.8% in 2024 to 14.2% in 2025, indicating improved profitability [4][14]. Market Position and Industry Outlook - The company is positioned as a leader in the special steel industry, with significant technological advancements in high-performance steel materials for clean energy applications [10]. - The report notes that the demand for special steel is expected to continue growing, particularly in high-end equipment manufacturing and clean energy sectors, which will provide further opportunities for profit expansion [10]. - The domestic hydropower installation capacity is projected to lead globally, with expectations to exceed the target of 120 GW by 2030, benefiting the company's product offerings [10].