Core Viewpoint - The company has initiated the "Win-Win No. 1" stock option incentive plan, with the first grant allowing for a total of 6.88518 million stock options to be exercised over two periods, aimed at motivating and retaining key personnel [1][2][3]. Summary by Sections Stock Option Grant Details - The first exercise period allows for 688,518 stock options, with the exercise window from May 29, 2024, to May 13, 2025, and a total of 950,120 shares expected to be transferred, representing 13.7995% of the total options [1]. - The second exercise period permits 3,890,812 stock options, with the exercise window from May 30, 2025, to May 13, 2026, and a total of 40.9852% of the options expected to be exercised [2]. Decision-Making Process and Disclosure - The decision-making process for the stock option plan involved multiple meetings where independent directors provided their consent, ensuring compliance with relevant regulations [3][4]. Exercise and Registration Information - The stock options will be exercised through a self-exercise model, with shares listed for trading on the second trading day after the exercise date [2][5]. - As of June 30, 2025, a total of 6,261,752 shares have been registered from the first exercise period, raising approximately 31.45 million yuan [5]. Impact on Financial Reports - The exercise of these stock options is not expected to have a significant impact on the company's financial condition or operating results [5].

Core Viewpoint - The anticorrosive steel pipe industry is experiencing growth due to advancements in technology and increasing demand across various sectors, leading to a diversification of materials and applications [1][22]. Industry Definition and Classification - Anticorrosive steel pipes are treated steel pipes designed to resist corrosion, with common coatings including epoxy resin, polyurethane, and polyethylene [3][6]. - The industry categorizes pipes based on manufacturing processes, shapes, applications, and anticorrosion technologies [5][6]. Current Industry Status - The demand for anticorrosive steel pipes is driven by infrastructure development in sectors such as oil, chemicals, gas, and water supply, with a projected demand of 1,168.2 million tons in 2024 and a market size of approximately 55.09 billion yuan [2][6]. - The annual production of anticorrosive steel pipes in China has remained above 16 million tons, with forecasts indicating production of 17.85 million tons in 2024 and 18.41 million tons in 2025 [2][8]. Industry Supply Chain - The upstream supply chain includes raw materials like steel and anticorrosive coatings, while the midstream focuses on the production and research of anticorrosive steel pipes [10]. - The downstream applications span various industries, including oil, chemicals, and water supply, with potential for strategic partnerships to enhance the supply chain [10]. Competitive Landscape - The anticorrosive steel pipe industry features a mix of large state-owned enterprises and numerous private and foreign companies, with state-owned firms dominating the high-end market [13][14]. - Key players include China Petroleum Group, Jiangsu Yulong Steel Pipe Technology, and Tianjin Youfa Steel Pipe Group, among others [3][15]. Industry Development Trends - The industry is shifting towards high-tech and high-performance products, with innovations in materials such as composite and nanomaterials expected to meet diverse market needs [1][22]. - Anticorrosive steel pipes are anticipated to play a crucial role in future infrastructure projects, enhancing their importance in corrosion prevention solutions [1][22].

Core Viewpoint - The business environment is a decisive factor influencing the rise and fall of business entities and the allocation of production factors [1][2] Group 1: Business Environment Improvement - In 2024, the growth of business entities in Liaoning is projected to be 3.1%, with activity levels surpassing the national average for the first time [4] - In the first quarter of this year, investment attraction in the province increased by 19.8% year-on-year [5] - These two indicators reflect a significant transformation in Liaoning's business environment, indicating that a favorable environment leads to thriving enterprises, which in turn stimulates economic growth [6][7] Group 2: Credit and Legal Framework - Liaoning has received 16 national-level credit awards from 13 ministries, showcasing its commitment to establishing a trustworthy business environment [8] - The province has implemented measures to enhance government integrity and has resolved over 580 issues related to legal and policy understanding for enterprises [10] - In 2024, 6.8 million business entities are expected to receive credit restoration assistance, with over 15,000 entities already completing credit repairs this year [8] Group 3: Administrative Efficiency - Liaoning has established 128 administrative review service points to expedite the processing of business-related cases, achieving a correction of 231 illegal administrative actions in 2024 [10] - The province aims to streamline administrative processes, reducing the average number of service windows and staff by 57.2% and 51.2%, respectively [11] - The integration of online and offline services has led to over 90% of administrative services being processed through a single window [11] Group 4: Digital Government Initiatives - Liaoning is advancing its digital government initiatives, with over 3.3 billion transactions processed through its integrated service platform [13] - The province has established 63 data-sharing channels to enhance government digital capabilities, facilitating better service delivery [13] - The focus is on improving the experience of businesses and citizens, ensuring that services are not only available but also efficient and user-friendly [13] Group 5: Economic Growth and Investment - In 2024, Liaoning is expected to see the addition of 6,206 technology-based SMEs and 1,625 high-tech enterprises, with a 12.8% increase in construction project investments [15] - Actual domestic investment in the province has increased by 14.6% year-on-year, reflecting a robust investment climate [15] - The province's proactive approach to service and support for businesses has fostered a welcoming environment for investment [15][16] Group 6: Financial Support and Collaboration - Liaoning's financial institutions had a total loan balance of 5.2 trillion yuan by the end of 2024, with significant year-on-year increases in loan amounts [17] - The province has introduced various policy measures to support economic growth and address the needs of enterprises, enhancing the alignment between policy supply and business demands [17] - Collaborative efforts among government, enterprises, and financial institutions are driving new initiatives and revitalizing the local economy [17]

Investment Rating - The report maintains a "Recommended" rating for the company [6] Core Views - The company reported a significant improvement in profitability on a quarter-over-quarter basis, with a continuous increase in dividend yield [1] - Despite a year-on-year decline in revenue and net profit, the company managed to increase its market share against a backdrop of industry contraction [3] - The company is expanding its national footprint and exploring overseas markets, particularly in Southeast Asia and the Middle East [3] Revenue and Profitability Summary - In 2024, the company achieved revenue of 54.822 billion yuan, a year-on-year decrease of 10.01% - The net profit attributable to shareholders was 425 million yuan, down 25.46% year-on-year - In Q4 2024, revenue was 14.752 billion yuan, showing a year-on-year increase of 0.59% and a quarter-over-quarter increase of 8.10% - The net profit for Q4 2024 was 324 million yuan, a year-on-year increase of 146.00% and a quarter-over-quarter turnaround to profit [1][2] Production and Sales Summary - The company's pipe sales volume in 2024 was 13.4734 million tons, a slight year-on-year decline of 0.90% - The overall production volume was 20.0949 million tons, down 0.93% year-on-year - The gross margin for Q4 2024 improved both year-on-year and quarter-over-quarter, reaching 5.03% [2] Dividend Policy - The company plans to distribute a cash dividend of 1.5 yuan per 10 shares, amounting to a total cash payout of 209 million yuan, with an annual cumulative dividend of 418 million yuan - The dividend payout ratio stands at 98.41%, resulting in a dividend yield of 5.49%, an increase of 0.61 percentage points year-on-year [2] Future Outlook - The company aims to maintain its leading position in the industry while increasing market share despite overall market declines - It is actively pursuing a national expansion strategy and establishing new production bases in Yunnan and Anhui, while also exploring international market opportunities [3][4] - The company has implemented an employee stock ownership plan to enhance long-term development and employee motivation [4] Financial Forecast - The projected net profit for 2025 is 626 million yuan, with expected growth rates of 47.3% in 2025, followed by 3.8% and 4.6% in 2026 and 2027 respectively - The corresponding price-to-earnings (PE) ratios for 2025, 2026, and 2027 are estimated to be 12, 12, and 11 times respectively [5][9]