Valin Steel(SZ:000932) Huafu Securities·2024-05-07 03:30Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 6.16 CNY, indicating an expected upside of over 20% in the next six months [3][9]. Core Views - The company's Q1 2024 performance shows a decline in revenue and net profit, with revenue at 36.912 billion CNY, down 7.17% year-on-year and 16.21% quarter-on-quarter. Net profit attributable to shareholders was 392 million CNY, down 43.14% year-on-year and 59.78% quarter-on-quarter [1]. - The steel industry is facing pressure on profits due to weak downstream demand and high raw material costs, leading to a decrease in gross margin to 5.86%, down 1.56 percentage points year-on-year [1]. - The company is focusing on upgrading its product structure towards high-end products, with 63% of its sales in specialty steel, and has increased R&D investment by 6% to 6.83 billion CNY, representing 4.2% of total revenue [1]. - The report anticipates a recovery in the steel industry, supported by policy measures and a gradual release of pent-up demand, which is expected to improve the company's performance in the coming quarters [1]. Financial Summary - For 2024, the company is projected to achieve a revenue of 165.106 billion CNY, a slight increase of 1% from 2023. Net profit is expected to rise to 5.308 billion CNY, reflecting a growth of 5% [2][6]. - The earnings per share (EPS) is forecasted to be 0.77 CNY for 2024, with a price-to-earnings (P/E) ratio of 6.8 [2][6]. - The company's total assets are projected to reach 137.869 billion CNY by 2024, with a debt-to-asset ratio of 49.5% [6].