Investment Rating - The investment rating for the company is "Buy" [4][6]. Core Views - The company has experienced a decline in net profit due to increased credit impairment losses and a challenging domestic market for refractory materials, but it is expected to enter a growth phase with its active magnesium oxide segment [1][4]. - The company has signed a strategic cooperation agreement with a partner, ensuring a substantial order volume for active magnesium oxide, which is anticipated to drive revenue growth in the coming years [4]. Financial Performance Summary - In the first half of 2025, the company achieved revenue of 2.794 billion yuan, a year-on-year increase of 3.57%, while net profit attributable to shareholders was 68.9 million yuan, down 48.26% year-on-year [1]. - The company’s revenue in Q2 2025 was 1.454 billion yuan, reflecting a 3.93% year-on-year growth, but net profit dropped significantly by 79.34% [1]. - The comprehensive gross margin for the first half of 2025 was 17.22%, a decrease of 1.85 percentage points year-on-year, primarily due to falling prices in the domestic refractory materials market [3]. Business Segment Performance - Domestic steel division revenue was 1.616 billion yuan, a slight increase of 1.45% year-on-year, mainly driven by order volume growth [2]. - Overseas steel division revenue reached 769 million yuan, up 6.41% year-on-year, with significant contributions from operations in the United States [2]. - The new materials division reported revenue of 279 million yuan, an 18.25% increase year-on-year, largely from the commencement of bulk supply of high-activity magnesium oxide [2]. Profitability and Forecast - The company’s net profit forecast for 2025-2027 is adjusted to 230 million yuan, 420 million yuan, and 590 million yuan, respectively, with corresponding P/E ratios of 34X, 19X, and 13X [4]. - The company is expected to see a gradual recovery in profitability as the proportion of overseas business increases [3].