Investment Rating - The report maintains a "Buy" rating for the company [5] Core Views - The company reported a revenue of 1.49 billion yuan in the first half of 2025, representing a year-on-year growth of 13.20%, while the net profit attributable to shareholders decreased by 31.36% to 84.56 million yuan [1] - The second quarter of 2025 saw a significant decline in net profit, down 52.11% year-on-year and 28.85% quarter-on-quarter, but the gross margin is expected to improve due to product structure optimization and increased downstream investment in thermal power [1] - The company has increased its high-end product shipments, with a notable rise in the sales volume of metal products by 11.35% year-on-year, and the total delivery of stainless steel reaching over 20,000 tons [2] - The company is expanding into the automotive parts industry, acquiring a 68% stake in Jiangsu Ruimei Automotive Parts Co., which positions it to benefit from the growth in new energy vehicles [3] - The company is focused on seamless steel pipe manufacturing for energy use, with an expected increase in profitability as high-end product ratios rise, despite short-term performance pressures from declining stainless steel pipe margins [3] Financial Summary - The company’s projected revenues for 2025 to 2027 are 2.93 billion yuan, 3.06 billion yuan, and 3.20 billion yuan respectively, with corresponding net profits of 207 million yuan, 264 million yuan, and 320 million yuan [4] - The earnings per share (EPS) for 2025 is estimated at 1.88 yuan, with a price-to-earnings (P/E) ratio of 20.1 [4] - The company’s return on equity (ROE) is projected to be 17.9% in 2025, increasing to 21.9% by 2027 [4]

Investment Rating - The report maintains a "Buy" rating for the company [5] Core Views - The company has shown significant revenue growth, with a 34.43% year-on-year increase in 2024, reaching 2.663 billion yuan, and a net profit growth of 87.38%, amounting to 226 million yuan [1] - The company is expanding its production capacity and improving its product mix, particularly in high-end products, which is expected to enhance profitability [2] - The company is diversifying into the automotive parts industry, which is anticipated to provide new profit growth points [3] - Future net profits are projected to be 272 million yuan in 2025, 300 million yuan in 2026, and 324 million yuan in 2027, with corresponding P/E ratios of 12.1, 11.0, and 10.2 [4] Financial Performance - In 2024, the company achieved a gross profit margin of 19.58% in Q1, which improved to 22.74% in Q1 2025, indicating a positive trend in profitability [1] - The company’s revenue is expected to grow at a decreasing rate, with projections of 10.0% growth in 2025, followed by 4.5% and 4.4% in 2026 and 2027 respectively [4] - The net profit margin is projected to improve from 8.5% in 2024 to 10.1% in 2027, reflecting enhanced operational efficiency [4] Production and Market Position - The company’s production capacity for stainless steel is set to reach 160,000 tons, making it the leader in the domestic market for small-diameter seamless steel pipes used in ultra-supercritical boilers [2] - The sales volume of alloy steel products increased by approximately 21.68% in the first half of 2024, while stainless steel product sales surged by about 81.06% [2] Strategic Initiatives - The company has acquired a 68% stake in Jiangsu Ruimei Automotive Parts Co., aiming to strengthen its position in the automotive parts sector [3] - The establishment of a wholly-owned subsidiary focused on lightweight manufacturing for automotive parts is expected to enhance the company's resilience and profitability [3]