Group 1 - The core viewpoint indicates that steel production remains stable, with potential supply reductions in Tangshan due to environmental regulations, which may support steel prices [1] - The profitability of major steel products is highlighted, with gross margins for high furnace rebar, hot-rolled, and cold-rolled steel at 121 CNY/ton, 151 CNY/ton, and 59 CNY/ton respectively, and an overall profitability rate of 65.8% for sample steel companies [1] - Long-term policies are expected to improve the supply-demand dynamics in the industry, combined with a decrease in raw material prices and process optimization in the first half of the year, indicating a recovery in industry profitability and significant mid-to-long-term investment value [1] Group 2 - The steel ETF (515210) tracks the CSI Steel Index (930606), which selects listed companies in the steel sector from the Chinese A-share market to reflect the overall performance of the steel industry [1] - The index constituents cover major segments of the steel supply chain, reflecting the market value and development trends of the raw materials industry [1] - Investors without stock accounts can consider the Guotai CSI Steel ETF Connect C (008190) and Guotai CSI Steel ETF Connect A (008189) [1]

Investment Rating - The report maintains a "Buy" rating for Shougang Co., Ltd. with a target price of 4.76 CNY [5][12]. Core Views - The company's net profit attributable to shareholders is expected to grow significantly in the first half of 2025, driven by a decline in raw material prices and ongoing product structure optimization [3][12]. - The report anticipates a gradual decrease in depreciation and amortization expenses, which will further enhance profitability [12]. - The overall industry supply-demand dynamics are expected to improve, leading to a recovery in profitability for the company [12]. Financial Summary - Total revenue for 2023 is projected at 113.76 billion CNY, with a decline of 3.7% year-on-year. However, net profit attributable to shareholders is expected to drop by 41% to 664 million CNY in 2023, before rebounding to 1.52 billion CNY in 2025, representing a growth of 223.1% [4][13]. - Earnings per share (EPS) is forecasted to increase from 0.09 CNY in 2023 to 0.20 CNY in 2025 [4][13]. - The return on equity (ROE) is expected to rise from 1.3% in 2023 to 3.0% in 2025 [4][13]. Product Structure Optimization - The company is focusing on enhancing its product mix, with electrical steel, automotive sheets, and tinplate being the three strategic products that offer higher added value. The total output of these products is expected to reach 7.07 million tons in 2024, a year-on-year increase of 10.9% [12]. - The company plans to develop medium-thick plates as its fourth strategic product, which is anticipated to become a new profit growth driver [12]. Industry Outlook - The report highlights a potential stabilization in steel demand as the negative impact from the real estate sector diminishes. The government is also implementing measures to control crude steel production, which may lead to long-term profitability recovery in the industry [12].