Core Viewpoint - Zhongxin Special Steel achieved a net profit attributable to shareholders of approximately 4.33 billion yuan in the first three quarters of 2025, representing a year-on-year increase of 12.88% [1] Financial Performance - In Q3 2025, the company reported a net profit of about 1.53 billion yuan, showing a year-on-year growth of 37.93% and a quarter-on-quarter increase of 8.32% [1] - The comprehensive gross profit margin for Q3 2025 reached 15.46%, marking the highest quarterly gross margin since mid-2022 [1] Market Outlook - The company benefits from sustained demand in downstream sectors, with both sales volume and gross profit per ton of special steel products increasing year-on-year, contributing to profit growth [1] - The optimistic outlook for the company's performance is supported by the expectation of continued favorable conditions in downstream markets [1] Valuation - Based on comparable companies' 2026 PE valuation of 17 times, the target price is set at 20.74 yuan, maintaining a "buy" rating [1]

Macro Summary - The State Council emphasizes deepening reforms in key areas and improving the regulatory system for factor market openness, with measures to accelerate the cultivation and large-scale application of new scenarios [4] - The manufacturing PMI for October is reported at 49.0%, a decrease of 0.8 percentage points from the previous month, indicating a decline in manufacturing activity [4] Industry Updates - The Shenzhou 21 manned spacecraft successfully docked with the space station, setting a record for the fastest docking time at 3.5 hours. Related stocks include Aerospace Electronics (600879) and China Satellite (600118) [6] - The CSRC and the Asset Management Association of China released a draft for new regulations to standardize performance benchmarks, guiding the fund industry back to an investor-centric approach. Related stocks include CITIC Securities (600030) and East Money Information (300059) [6] - Five departments issued an action plan aiming to establish over 50 fully digital transformation cities by the end of 2027, promoting deep integration of AI and urban development. Related stocks include Tonghuashun (300033) and Kingsoft Office (68811) [6] Company Focus - Tianhua New Energy (300390): The controlling shareholders plan to transfer a total of 108 million unrestricted circulating shares to CATL through an agreement [8] - Shanghai Electric (601727): The company is expected to achieve stable growth in performance by aligning with national strategic goals [8] - Yongxing Materials (002756): The main products are stainless steel bars and special alloy materials, with applications in the nuclear power sector after further processing by downstream customers [8] - Dongtu Technology (300353): The company disclosed a restructuring plan to acquire 100% of Beijing Gaoweike Electric Technology Co., which will become a wholly-owned subsidiary post-transaction [8] Market Review and Outlook - On October 31, the market experienced a broad decline, with the Shanghai Composite Index down 0.81%, the Shenzhen Component down 1.14%, and the ChiNext Index down 2.31%. Despite this, nearly 3,800 stocks rose, indicating active market participation [10] - The innovation drug sector showed strength, with multiple stocks hitting the upper limit. The film and theater concept stocks also performed well, with Bona Film Group reaching the upper limit [11] - The technical outlook indicates that while the Shanghai Composite Index has fallen below the 5-day moving average, the MACD indicator remains in a bullish crossover, suggesting potential support around the 3,950-point level [11]

新京报贝壳财经讯11月1日，永兴材料（002756）在互动平台回复投资者称，公司特钢新材料业务主营 产品为不锈钢棒线材及特殊合金材料，特钢产品经下游客户深加工后，可应用于核电领域。公司将持续 关注产品需求变化，优化产品结构，提高新领域新产品市场占比。 ...

Core Viewpoint - The company, Yongxing Materials, is focusing on its special steel new materials business, particularly stainless steel bar and wire materials, which can be applied in the nuclear power sector after further processing by downstream customers [1] Group 1: Business Focus - The main products of the special steel new materials business are stainless steel bar and wire materials, as well as special alloy materials [1] - The company aims to continuously monitor changes in product demand and optimize its product structure [1] Group 2: Market Strategy - Yongxing Materials plans to increase the market share of new products in emerging fields [1]

Investment Rating - The report maintains a rating of "Accumulate" for the company [5][7]. Core Views - The company's Q3 revenue reached 1.853 billion RMB, a year-on-year increase of 6.61% but a quarter-on-quarter decrease of 2.70%. The net profit attributable to shareholders was 131 million RMB, down 35.40% year-on-year and 37.55% quarter-on-quarter [1][2]. - The increase in lithium prices has led to an improvement in the company's gross margin, which was 16.55% in Q3, a quarter-on-quarter increase of 1.78% despite a year-on-year decrease of 0.20 percentage points [2][3]. - The report highlights the expected upward trend in lithium prices due to supply constraints and increasing demand from the energy storage sector, which is anticipated to support the company's performance recovery [3][4]. Summary by Sections Financial Performance - For the first three quarters of 2025, the company achieved a total revenue of 5.547 billion RMB, down 10.98% year-on-year, with a net profit of 532 million RMB, a decrease of 45.25% year-on-year [1][5]. - The company’s total expenses in Q3 were 6.58%, an increase of 2.16 percentage points year-on-year and 1.52 percentage points quarter-on-quarter, with notable increases in sales, management, and R&D expenses [2][4]. Market Outlook - The report anticipates that the lithium market will experience a strong supply-demand dynamic in 2026, driven by robust energy storage demand, which is expected to support lithium price stability and potentially enhance the company's earnings [3][4]. - The company is also focusing on expanding its lithium production capacity and improving its product structure, which is expected to contribute positively to its financial performance in the upcoming quarters [4][5]. Earnings Forecast and Valuation - The earnings per share (EPS) estimates for 2025, 2026, and 2027 are projected to be 1.72 RMB, 2.41 RMB, and 3.12 RMB respectively. The target price for the company is set at 50.79 RMB, reflecting an increase from the previous target of 38.39 RMB [5][7]. - The report uses a comparative valuation method, suggesting a price-to-earnings (PE) ratio of 12.5 for the steel segment and 28.7 for the lithium materials segment in 2026 [5][12].

Market Overview - The special steel sector experienced a decline of 0.16% on October 31, with Fushun Special Steel leading the drop [1] - The Shanghai Composite Index closed at 3954.79, down 0.81%, while the Shenzhen Component Index closed at 13378.21, down 1.14% [1] Stock Performance - Notable stock performances included: - Xianglou New Material (301160) rose by 3.72% to 64.44 with a trading volume of 38,900 lots and a turnover of 250 million [1] - Jiao Jin Co. (603995) increased by 1.27% to 18.33 with a trading volume of 67,800 lots and a turnover of 124 million [1] - Fushun Special Steel (6653009) fell by 2.06% to 5.24 with a trading volume of 374,300 lots and a turnover of 197 million [2] Capital Flow - The special steel sector saw a net outflow of 72.73 million from main funds, while retail investors contributed a net inflow of 78.74 million [2] - The capital flow for specific stocks showed: - Sand Steel (002075) had a main fund outflow of 30.51 million and a retail inflow of 12.39 million [3] - CITIC Special Steel (000708) experienced a main fund inflow of 15.09 million and a retail outflow of 43.02 million [3]

Core Insights - The company has over 40 years of experience in the special steel industry and has successfully transformed from a cutting tool manufacturer to a leading international high-end materials enterprise covering four major segments: high-speed steel, tool steel, cutting tools, and titanium alloys [1] - The company exhibits strong profitability and effective cost management, with stable gross and net profit margins, and maintains high R&D investment to support long-term growth [1] - The tool steel segment is a cornerstone for the company, holding the largest global market share in tool steel and high-speed steel, providing stable cash flow and strong risk resistance [1] - The titanium alloy business is positioned to capture emerging demand in high-value sectors, particularly in consumer electronics, which is expected to drive future revenue growth despite short-term demand fluctuations [2] - Powder metallurgy technology is identified as a foundational capability for entering strategic new materials and high-end manufacturing sectors, potentially enhancing both performance and valuation [3] - The company is expected to achieve significant revenue and profit growth in the coming years, with projections of revenues reaching 49.41 billion, 56.99 billion, and 65.45 billion yuan for 2025, 2026, and 2027 respectively, alongside net profits of 4.31 billion, 6.20 billion, and 8.50 billion yuan [4] Financial Performance - The company is projected to achieve revenue growth rates of 2.2%, 15.3%, and 14.8% for the years 2025, 2026, and 2027 respectively [4] - The expected net profit growth rates are 20.0%, 43.9%, and 37.2% for the same years [4] - The company’s 2026 price-to-earnings (PE) ratio is estimated at 12X, which is below the industry average PE of 37X, indicating potential undervaluation [4]

Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [5][9]. Core Insights - The company is a leading player in the global tool steel sector, with a solid foundation for sustainable profitability. It has made breakthroughs in powder metallurgy and titanium alloy technologies, positioning itself in high-growth sectors such as integrated die-casting for electric vehicles, consumer electronics, and aerospace, establishing a clear second growth curve [6][9]. - Revenue projections for 2025, 2026, and 2027 are estimated at 49.41 billion, 56.99 billion, and 65.45 billion RMB, respectively, with year-on-year growth rates of 2.2%, 15.3%, and 14.8%. Corresponding net profits are projected at 4.31 billion, 6.20 billion, and 8.50 billion RMB, with growth rates of 20.0%, 43.9%, and 37.2% [6][9]. Summary by Sections Market Performance - As of October 28, 2025, the closing price is 3.05 HKD, with a market capitalization of 8,311.25 million HKD. The stock has seen a one-year high of 3.28 HKD and a low of 1.65 HKD [3]. Business Overview - The company has been in the special steel industry for over 40 years, evolving from a cutting tool manufacturer to a leader in high-end materials, covering high-speed steel, tool steel, cutting tools, and titanium alloys [8][18]. - The company has a concentrated and stable shareholding structure, with the Zhu family as the actual controllers, ensuring strategic execution continuity [8][17]. Financial Performance - The company reported a revenue of 5,163.31 million RMB in 2023, with a projected decline in 2024 followed by a recovery in subsequent years. The gross profit margin and net profit margin have remained stable, supported by high R&D investment [7][31]. - The first half of 2025 saw a revenue decline of 7.1% year-on-year, attributed to reduced exports and lower demand from consumer electronics. However, net profit increased by 10.4% due to favorable currency exchange rates and improved gross margins in tool steel [22][23]. Growth Drivers - The company’s core business in tool steel is expected to enter an upward cycle, driven by domestic demand recovery and import substitution in high-end materials [8][22]. - The titanium alloy business is positioned to benefit from expanding demand in consumer electronics and aerospace, with significant growth potential as the market evolves [8][37]. Technological Advancements - The company has successfully established a powder metallurgy production line, filling a domestic gap in the large-scale production of tool steel, and is expected to lead in domestic substitution efforts [15][18]. - Ongoing R&D efforts have resulted in numerous innovations, including high-nitrogen alloy materials and advanced titanium products, enhancing the company's competitive edge in high-end manufacturing [31][34].

Core Viewpoint - Fangda Special Steel (600507) has significant technological accumulation in the spring steel material field, enhancing product design stress, weight, and fatigue life compared to traditional products, aligning well with the current heavy truck industry's development needs [1] Company Summary - The company has completed road test verification for steel plate springs and has delivered them in small batches [1] - The stabilizer bar is currently in the sample trial production stage [1] Industry Summary - The advancements in spring steel materials are crucial for meeting the evolving demands of the heavy truck industry [1]

Market Overview - The special steel sector increased by 1.04% on October 30, with Fangda Special Steel leading the gains [1] - The Shanghai Composite Index closed at 3986.9, down 0.73%, while the Shenzhen Component Index closed at 13532.13, down 1.16% [1] Stock Performance - Fangda Special Steel (600507) closed at 5.90, up 6.50% with a trading volume of 981,700 shares and a transaction value of 586 million [1] - Shengde Yantai (300881) closed at 36.79, up 5.60% with a trading volume of 61,100 shares [1] - Shagang Co. (002075) closed at 5.73, up 1.96% with a trading volume of 781,000 shares [1] - Fushun Special Steel (600399) closed at 5.35, up 1.33% with a trading volume of 528,600 shares [1] - Other notable performances include Taigang Stainless Steel (000825) up 0.95% and CITIC Special Steel (000708) up 0.69% [1] Capital Flow - The special steel sector saw a net inflow of 89.97 million from main funds, while retail funds had a net inflow of 11.61 million [2] - The sector experienced a net outflow of 102 million from speculative funds [2] Individual Stock Capital Flow - Fangda Special Steel had a net inflow of 11.2 million from main funds but a net outflow of 70.55 million from speculative funds [3] - Fushun Special Steel saw a net inflow of 37.35 million from main funds, with a net outflow of 17.73 million from speculative funds [3] - Changbao Co. (002478) had a net inflow of 16.83 million from main funds, while experiencing a net outflow of 13.13 million from speculative funds [3] - CITIC Special Steel had a net inflow of 16.73 million from main funds but a net outflow of 29.45 million from retail investors [3]