FANGDA S.Steel(SH:600507) EBSCN·2024-03-17 16:00Investment Rating - The report maintains a rating of "Add" for the company [6][14]. Core Views - The company reported a total revenue of 26.507 billion yuan in 2023, a year-on-year decrease of 15.75%, and a net profit attributable to shareholders of 689 million yuan, down 35.16% year-on-year [1]. - In Q4 2023, the company achieved a revenue of 6.817 billion yuan, a year-on-year decline of 4.65%, but an increase of 8.18% compared to Q3 [1]. - The company did not declare any cash dividends in 2023 [1]. - The company’s steel and spring production is expected to decrease by 1.98% year-on-year in 2024, with total production projected at 4.106 million tons [2]. - The company has maintained positive free cash flow from 2012 to 2023, with a free cash flow of 505 million yuan in 2023 [3]. - The company’s return on equity (ROE) for 2023 was 14.37%, while the return on invested capital (ROIC) was 5.54% [3]. Financial Performance - The company’s total steel production in 2023 was 4.086 million tons, a decrease of 4.04% year-on-year, while spring production increased by 10.25% to 105,400 tons [12]. - The average price of steel products was 6,281.65 yuan per ton, an increase of 18.23% year-on-year, but the gross profit per ton of steel decreased by 14.17% to 378.40 yuan [12]. - The company ranked first in profit per ton among its peers in the China Iron and Steel Association in 2023 [13]. Profit Forecast and Valuation - Due to a decline in steel industry demand, the company’s net profit forecasts for 2024 and 2025 have been reduced by 54.94% and 52.68%, respectively, with new projections for 2026 set at 941 million yuan [14]. - The company’s profit per ton remains competitive, maintaining a leading position among its peers [14].