MAS C.L.(SH:600808) Guotai Junan Securities·2024-04-23 01:32Investment Rating - The report maintains a "Buy" rating for the company [2][3]. Core Views - The company's performance in 2023 was slightly below expectations, primarily due to a larger decline in steel prices compared to raw material prices, leading to short-term pressure on earnings. However, the report is not pessimistic about the supply-demand dynamics in the steel industry for 2024, anticipating a gradual recovery in industry profitability [2]. - The company's revenue for 2023 was CNY 98.938 billion, a year-on-year decrease of 3.15%, and the net profit attributable to shareholders was CNY -1.327 billion, down 54.75% year-on-year. The report has adjusted the net profit forecasts for 2024-2025 to CNY 0.68 million and CNY 1.20 million, respectively, and introduced a new forecast for 2026 at CNY 1.77 million [2][3]. - The report highlights the successful commissioning of the first phase of the new special steel project, which is expected to optimize the product structure and enhance profitability. The project aims to produce high-value-added steel products [2]. Summary by Sections Financial Performance - In 2023, the company's steel production and sales volume reached 20.615 million tons and 20.595 million tons, respectively, with year-on-year increases of 3.66% and 3.61%. The gross profit per ton of steel was CNY 79.14, a decrease of 52.44% year-on-year [2]. - The report projects a revenue of CNY 98.587 billion for 2024, with a slight recovery expected in subsequent years [7]. Valuation - The report assigns a price-to-book (PB) ratio of 0.86 for 2024, leading to a target price adjustment to CNY 3.09 from the previous CNY 3.39 [2][11]. - The current stock price is CNY 2.53, with a market capitalization of CNY 19.6 billion [4][3]. Industry Outlook - The report expresses a cautious optimism regarding the steel industry's demand, noting that while real estate remains a drag on demand, the impact is expected to lessen as the share of real estate demand in the steel sector declines. Infrastructure and manufacturing sectors are anticipated to maintain steady growth, which could offset the downturn in real estate [6].