Core Viewpoint - The company reported a slight decline in revenue for the first half of 2025, but managed to achieve a modest increase in net profit, indicating resilience in a challenging market environment [4][5]. Financial Performance - In H1 2025, the company achieved operating revenue of 54.715 billion yuan, a year-on-year decrease of 4.02%, while net profit attributable to shareholders was 2.798 billion yuan, an increase of 2.67% [4]. - For Q2 2025, the company reported operating revenue of 27.875 billion yuan, a year-on-year decrease of 2.45%, but a quarter-on-quarter increase of 3.86% [4]. - The net profit for Q2 was 1.414 billion yuan, reflecting a year-on-year increase of 3.58% and a quarter-on-quarter increase of 2.21% [4]. Sales and Pricing - The company sold 9.8226 million tons of steel in H1 2025, a year-on-year increase of 3.23%, with exports remaining stable at 1.1216 million tons [5]. - The average selling price of steel products in H1 2025 was 5,570 yuan per ton, a decrease of 7.02% year-on-year, while the gross profit per ton increased by 8.56% to 800 yuan [6]. Product Demand and Structure Adjustment - The company actively seized opportunities in industries with strong demand, such as wind power, oil and gas, hydrogen energy, and new energy vehicles, adjusting its product structure accordingly [8]. - Sales of automotive steel rods and wires remained stable at 2.85 million tons, while sales of wind power billets increased by 2.6% to 1.592 million tons [8]. International Expansion - The company has made progress in its international projects, with plans to accelerate overseas project implementation in the second half of 2025 [9]. Shareholder Returns - The company plans to implement semi-annual dividends to enhance shareholder returns, with a total cash dividend of 1.009 billion yuan in H1 2025, representing a payout ratio of 36.07% [10].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of RMB 17.88, up from the previous value of RMB 17.42 [4][6]. Core Views - The company demonstrated strong resilience in its development, with a slight year-over-year revenue decline of 4.02% to RMB 54.715 billion in H1 2025, while net profit increased by 2.67% to RMB 2.798 billion [1][2]. - The company is focusing on strategic sectors such as wind power, oil and gas, hydrogen energy, pumped storage, and new energy vehicles, which are expected to drive demand for its products [2]. - The steel industry is entering a phase where the urgency and strategic nature of anti-involution policies are being debated, with potential production cuts that could enhance profitability if implemented [3]. Summary by Sections Financial Performance - In Q2 2025, the company achieved revenue of RMB 27.875 billion, a year-over-year decrease of 2.45% but a quarter-over-quarter increase of 3.86%. Net profit for the same period was RMB 1.414 billion, reflecting a year-over-year increase of 3.58% [1][2]. - The gross margin for Q2 2025 was reported at 14.89%, an increase of 1.07 percentage points from the previous quarter [2]. Market Position and Strategy - The company is a leader in the special steel sector, with a strong focus on optimizing its product structure and enhancing quality and efficiency [2]. - The sales distribution of products across various sectors includes 35% in energy, 25% in automotive, 20% in machinery, and 10% in bearings [2]. Earnings Forecast - The earnings per share (EPS) forecast for 2025, 2026, and 2027 is projected to be RMB 1.14, RMB 1.28, and RMB 1.49 respectively [4][10]. - The report anticipates a recovery in profitability driven by potential production cuts in the steel industry, contingent on government policy implementation [3].