Guotou Securities·2025-11-02 11:31Investment Rating - The report assigns a "Buy-A" rating to the company with a 12-month target price of 4.06 CNY, compared to the current stock price of 3.49 CNY [4]. Core Insights - The company's revenue for the first three quarters of 2025 was 335.09 billion CNY, representing a year-over-year decline of 18.79%. The net profit attributable to shareholders was 3.97 billion CNY, down 41.88% year-over-year [2][3]. - In Q3 2025, the revenue was 97.56 billion CNY, a decrease of 14.25% year-over-year, while the net profit was 871 million CNY, down 67.52% year-over-year. However, the revenue decline in Q3 showed a narrowing trend compared to previous quarters [2][3]. - The gross profit margin improved to 10.00%, an increase of 0.96 percentage points year-over-year, while the net profit margin decreased to 1.61%, down 0.26 percentage points year-over-year due to increased expense ratios and taxes [3]. Summary by Sections Revenue and Profitability - The company experienced a significant revenue decline due to external factors such as the ongoing downturn in the steel industry, sluggish growth in the construction sector, and deep adjustments in the real estate market. The revenue growth rates for Q1, Q2, and Q3 were -18.46%, -22.59%, and -14.25%, respectively [2]. - The net profit decline was more pronounced than the revenue decline, attributed to increased expense ratios, taxes, and minority interests [2]. Cash Flow and Contracts - The operating cash flow showed improvement, with a net outflow of 19.39 billion CNY, which was 11.35 billion CNY less than the previous year, indicating better cash collection efforts [3]. - New contracts signed in the first nine months totaled 760.67 billion CNY, a decrease of 14.7% year-over-year, with overseas contracts amounting to 66.90 billion CNY, reflecting a growth of 10.1% year-over-year [4]. Future Outlook - The company’s mineral resources, particularly in nickel, cobalt, copper, lead, and zinc, are expected to undergo a value reassessment due to rising resource prices and the upcoming production from existing overseas mines [4][9]. - Revenue projections for 2025-2027 are estimated at 476.54 billion CNY, 495.13 billion CNY, and 516.54 billion CNY, with corresponding net profits of 5.71 billion CNY, 6.01 billion CNY, and 6.30 billion CNY [9][10].