Core Viewpoint - New Steel Co., Ltd. is a leading regional player in the steel industry, focusing on high-end steel products and has a strong R&D capability in the electrical steel sector [1] Group 1: Business Performance - In Q3 2025, New Steel's revenue was 27.225 billion, ranking 13th among 17 companies in the industry, with Baosteel leading at 232.436 billion [2] - The net profit for the same period was 373 million, placing the company 8th in the industry, with Baosteel at 8.908 billion [2] Group 2: Financial Ratios - As of Q3 2025, New Steel's debt-to-asset ratio was 44.41%, lower than the industry average of 63.37% and down from 49.09% the previous year [3] - The gross profit margin was 3.96%, an improvement from -0.50% year-on-year but still below the industry average of 5.68% [3] Group 3: Management and Shareholder Information - The chairman, Liu Jianrong, has extensive experience in steel production and management, while the general manager, Liao Peng, saw an increase in salary to 1.0961 million, up 83,800 from the previous year [4] - As of September 30, 2025, the number of A-share shareholders decreased by 11.78% to 38,200, while the average number of shares held per shareholder increased by 13.35% to 82,400 [5] Group 4: Market Outlook and Predictions - The company is expected to see significant improvements in profitability, with projected net profits of 680 million, 950 million, and 1.17 billion for 2025, 2026, and 2027 respectively [5] - High-end product sales have increased significantly, with hot-rolled high-end products up 97.6%, and other premium products also showing strong growth [6]

Investment Rating - The report maintains a "Buy" rating for the company [3][6]. Core Views - The company has shown significant improvement in quarterly profitability, with a net profit of 2.49 billion yuan in Q3 2025, a year-on-year increase of 149.46% and a quarter-on-quarter increase of 152.43% [2]. - The company has successfully turned around from a net loss of 5.79 billion yuan in the same period last year to a net profit of 3.6 billion yuan for the first three quarters of 2025 [1][3]. - The strategic focus on high-end products has led to an increase in the sales of premium steel varieties, with hot-rolled high-end products increasing by 97.6% [3]. Financial Performance - For the first three quarters of 2025, the company reported total revenue of 27.225 billion yuan, a year-on-year decrease of 12.68% [1]. - The average sales gross margin for the quarters from Q4 2024 to Q3 2025 is projected to improve, with figures of 5.18%, 3.06%, 3.42%, and 5.27% respectively [2]. - The company’s net profit for 2025 is expected to reach 675 million yuan, with a significant growth rate of 1,959.3% year-on-year [5]. Market Position and Strategy - The company has exited low-end trading businesses and is focusing on developing high-value-added products, establishing itself as a global leader in premium silicon steel and high-quality thick plates [3]. - The company’s major shareholder, New Steel Group, has shown confidence by increasing its stake in the company, acquiring approximately 40.32 million shares, which is about 1.27% of the total share capital [3]. Future Outlook - The report forecasts that the company's net profit will continue to improve, with estimates of 680 million yuan, 950 million yuan, and 1.17 billion yuan for the years 2025 to 2027 respectively [3]. - The valuation of the company is expected to have significant recovery potential, with a projected market value of around 17.2 billion yuan at the mid-point of the valuation range [3].

Summary of New Steel Co. Conference Call Company Overview - **Company**: New Steel Co. (新钢股份) - **Date**: September 18, 2025 Key Points Financial Performance - **Net Profit Growth**: New Steel Co. reported a significant increase in net profit for the first half of the year, reaching 174 million yuan, an increase of 152 million yuan year-on-year [4][2] - **Production and Sales Decline**: The company experienced a 13.93% decrease in production and a 12.04% decrease in sales compared to the previous year, primarily due to a major furnace overhaul in Q1 and increased environmental investment [2][6] - **Profitability Comparison**: Despite the growth in net profit, there remains a gap compared to Q4 of the previous year, attributed to the costs associated with the furnace overhaul and environmental compliance [2][6] Strategic Initiatives - **High-Value Product Focus**: The company is shifting towards producing high-value, high-margin products, with a notable 97.6% increase in high-end hot-rolled products [2][9] - **Cost Management**: New Steel Co. has successfully reduced logistics costs by over 100 million yuan in the first half of the year through increased sea freight and negotiating railway transport discounts [2][6] - **Collaboration with Baowu Group**: The partnership with Baowu Group has enhanced procurement efficiency, particularly in raw materials and auxiliary materials, leading to cost advantages [2][8][16] Market Strategy - **End-Market Development**: The company has focused on maintaining and expanding its end-market presence, particularly in high-strength carbon plates and international markets like the Middle East, achieving a 66.7% focus on key customers [5][10] - **Production Adjustments**: New Steel Co. plans to continue adjusting production based on profitability, with expectations for improved performance in Q3 compared to Q2 [3][17] Investment and Cash Management - **Investment Income**: The company's investment income has decreased due to lower interest rates set by the central bank, impacting returns from long-term financial products [11][12] - **Cash Reserves**: New Steel Co. holds substantial cash reserves (approximately 2-3 billion yuan) for loan repayments, raw material purchases, and technological upgrades [12][13] Environmental and Regulatory Compliance - **Environmental Investments**: Increased spending on environmental projects has impacted costs, but the company is committed to complying with national policies and improving production efficiency [2][9][20] Future Outlook - **Market Trends**: The company anticipates that the profitability trend will continue into Q3, driven by structural adjustments and a focus on high-margin products [3][17] - **Dividend Policy**: New Steel Co. has maintained a high dividend payout ratio exceeding 90%, reflecting its commitment to shareholder returns [18][19] Challenges and Risks - **Loan Pressure**: The company faces pressure from environmental loans, which may limit profit flexibility [2][6] - **Market Volatility**: Fluctuations in raw material prices, particularly coking coal, could impact procurement strategies and overall cost management [14][15] Conclusion New Steel Co. is navigating a challenging environment with strategic shifts towards high-value products, effective cost management, and a strong focus on compliance and market development. The outlook remains cautiously optimistic with expectations for continued profitability improvements in the upcoming quarters.

Core Viewpoint - The steel industry has achieved profit margin improvement through self-discipline and cost control in the context of "anti-involution," with expectations for increased industry concentration in the future [1]. Industry Summary - The steel industry is experiencing a shift towards self-discipline and cost management, leading to profitability recovery, which is recognized as a consensus across various sectors including photovoltaic, lithium battery, and automotive industries [1]. Company Summaries - Baosteel's semi-annual report shows a revenue of 151.37 billion yuan, a year-on-year decrease of 7.3%, while net profit attributable to shareholders reached 4.88 billion yuan, an increase of 7.4%. Operating cash flow surged by 190% to 16.647 billion yuan, maintaining strong profitability and industry leadership [1]. - Baosteel's chairman emphasized a focus on mid-to-high-end products, which are expected to perform better in the market regardless of trade and tariff barriers [1]. - New Steel's semi-annual revenue was 17.512 billion yuan, down 18.33% year-on-year, but it achieved a net profit of 111 million yuan, marking a turnaround. The company has formed a special task force to enhance sales of high-end products, with significant increases in sales of hot-rolled high-end products by 97.6% and over 20% for premium steel and silicon steel [1].

Core Viewpoint - Xinyu Steel Co., Ltd. reported a decline in revenue and a return to profitability in the first half of 2025, driven by strategic adjustments in production and cost management [1][2]. Financial Performance - In the first half of 2025, the company achieved operating revenue of 17.512 billion yuan, a year-on-year decrease of 18.33% [1]. - The net profit attributable to shareholders was 111 million yuan, compared to a loss of 75.4729 million yuan in the same period last year [1]. Industry Context - The steel industry continues to face weak downstream demand and high supply levels, leading to fluctuating steel prices and slow recovery in overall profitability [2]. - The company is responding to market pressures by reducing production scale to mitigate risks associated with price declines [2]. Operational Strategies - Xinyu Steel is focusing on enhancing efficiency rather than scale, optimizing production processes to improve operational metrics such as blast furnace utilization [2]. - The company has implemented cost reduction initiatives, including competitive procurement strategies and targeted cost control measures for raw materials [2][3]. Product Development - The steel industry is shifting towards high-end, intelligent, and green products, with Xinyu Steel actively promoting differentiation in its product offerings [4]. - In the first half of 2025, the company reported significant increases in sales of high-end products, with hot-rolled high-end varieties up by 97.6% and other premium products also showing substantial growth [4]. Future Outlook - Xinyu Steel aims to establish itself as a global leader in high-quality silicon steel and thick plates, planning to exit low-end trading businesses and focus on high-value-added products [5].