Investment Rating - The investment rating for the company is "Buy-A" with a target price of 11.90 CNY, maintaining the rating [3][9]. Core Views - The company is experiencing short-term pressure on profitability, with expectations for operational improvement and demand recovery in the future [2][3]. - The company has a strong position in the mid-to-high-end market for decorative paper, with significant advantages in product quality, cost control, and customer resources, indicating potential for market share growth and long-term growth prospects [2][3]. - The company has made positive progress in response to the EU anti-dumping investigation, with a reduction in the anti-dumping tax rate from 34.9% to 26.4%, which is expected to have a limited impact on sales in Europe [2][3]. Financial Performance Summary - In H1 2025, the company achieved revenue of 1.627 billion CNY, a year-on-year decrease of 16.43%, and a net profit of 156 million CNY, down 48.47% year-on-year [1][3]. - The gross margin for H1 2025 was 12.99%, a decline of 5.66 percentage points year-on-year, with Q2 2025 gross margin at 12.24%, down 4.96 percentage points year-on-year [3][9]. - The company’s net profit margin for H1 2025 was 9.57%, a decrease of 5.95 percentage points year-on-year [9]. Revenue and Profit Forecast - The company is projected to achieve revenues of 4.038 billion CNY, 4.360 billion CNY, and 4.753 billion CNY for 2025, 2026, and 2027 respectively, with year-on-year growth rates of 7.16%, 7.95%, and 9.02% [9][11]. - The forecasted net profit for 2025 is 425 million CNY, with a year-on-year decline of 9.44%, followed by growth of 13.40% and 13.45% in 2026 and 2027 respectively [9][11].

Investment Rating - The report maintains a "Buy" rating for the company [5] Core Views - The company reported a significant increase in quarterly profits, with a net profit of 1.463 billion yuan for the first half of 2025, representing an 18.63% year-on-year growth [1] - The company has shown a strong improvement in profit margins, with a net profit margin increasing to 5.75% in Q2 2025, benefiting from optimized product structure and agile operational strategies [1][2] - The company is transitioning towards high-end products, with advanced steel material sales accounting for 29.77% of total sales, up 2.64 percentage points year-on-year [2] Financial Performance - In the first half of 2025, the company achieved operating revenue of 28.944 billion yuan, a decrease of 14.06% year-on-year, while the net profit attributable to shareholders reached 1.463 billion yuan, an increase of 18.63% [1] - The company’s Q2 2025 net profit was 0.885 billion yuan, reflecting a year-on-year growth of 30.21% and a quarter-on-quarter growth of 52.94% [1] - The company’s financial projections indicate a recovery in revenue, with expected operating income of 67.849 billion yuan in 2025, a 9.8% year-on-year increase [4] Dividend Policy - The company plans to distribute a cash dividend of 1.186 yuan per 10 shares for the second half of 2025, totaling approximately 731 million yuan, which is 50% of the net profit attributable to shareholders for the first half of 2025 [3] Strategic Developments - The company has joined the CITIC Group, transitioning to a state-owned enterprise structure, which enhances resource sharing and operational synergies [3] - The company is focusing on high-end specialized plate and special steel long product manufacturing, which is expected to benefit from improvements in industry supply and demand dynamics [3]