xinsteel(600782) Guotai Junan Securities·2024-04-25 12:32Investment Rating - The report maintains an "Accumulate" rating for Xinsteel Co., Ltd. (600782) with a target price of 4.73 CNY, up from the previous forecast of 4.02 CNY [1][2]. Core Views - The company is actively promoting reform and innovation, which is expected to help reduce costs and improve efficiency. Despite facing industry headwinds, the company's profitability is anticipated to gradually recover [1][2]. - The company's revenue for 2023 is reported at 71.14 billion CNY, a year-on-year decrease of 28.14%. The net profit attributable to shareholders is 498 million CNY, down 52.43% year-on-year, aligning with expectations [1][2]. - The report highlights that the company has joined China Baowu Steel Group, which is driving changes in its organizational structure and product mix, potentially enhancing profitability [1][2]. Summary by Sections Financial Performance - In 2023, the company’s steel sales volume reached 10.82 million tons, with a gross profit per ton of 125 CNY, down 59.42% year-on-year. The net profit per ton was 46.02 CNY, also reflecting a decline [1][2]. - The forecast for net profit attributable to shareholders for 2024 and 2025 is set at 885 million CNY and 1.02 billion CNY, respectively, with corresponding EPS of 0.28 CNY and 0.32 CNY [1][2]. Valuation - The report suggests a cautious valuation approach, assigning a PB ratio of 0.55 for 2024, based on comparable companies in the same sector [4][12]. - The average PB for comparable companies is noted to be 0.58, indicating a conservative stance in the valuation of Xinsteel [4][12]. Market Position - The company is focusing on optimizing its product structure, particularly in high-quality silicon steel and thick plates, which is expected to enhance its competitive edge and profitability [1][2]. - The report emphasizes that the company is planning significant projects related to new energy vehicle silicon steel and upgrades to its medium plate production line, which will further improve its product competitiveness [1][2].