Core Viewpoint - The report from Dongfang Securities indicates that Changbao Co., Ltd. achieved a cumulative net profit attributable to shareholders of approximately 390 million yuan in the first three quarters of 2025, with a non-recurring net profit of about 350 million yuan, reflecting a year-on-year growth of 0.8% [1] Financial Performance - In the first half of 2025, the oil and gas industry faced weak market demand, particularly in overseas markets, which put short-term pressure on the company's profitability [1] - In Q3 2025, the company continued to promote its high-end product transformation, with an increasing overall proportion of specialty products such as 13Cr, HRSG, and oil cylinder pipes [1] - The gross profit margin for Q3 2025 improved sequentially to 17.70% [1] Strategic Outlook - The company is expected to continue its high-end product strategy, which is anticipated to lead to sustained improvements in performance and profitability [1] - Based on comparable companies' 2025 PE valuation of 16X, the target price is set at 10.40 yuan, maintaining a "buy" rating [1]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 10.40 CNY based on a PE valuation of 16X for 2025 [3][5]. Core Insights - The company has seen improvements in its non-recurring performance, with a year-on-year increase in non-recurring net profit of 0.8% for the first three quarters of 2025, despite facing short-term pressure from the oil and gas industry's weak demand [10]. - The company is actively pursuing a high-end product transformation strategy, with a focus on specialty products such as 13Cr, HRSG, and oil cylinder pipes, which are expected to enhance profitability [10]. - The demand for the company's main products, including oil casing and boiler pipes, is anticipated to remain strong due to ongoing investments in the oil and gas extraction and thermal power construction sectors [10]. Financial Performance Summary - The company's projected revenue for 2025 is 6,085 million CNY, reflecting a 6.8% year-on-year growth, following a decline of 14.5% in 2024 [4]. - The net profit attributable to the parent company is expected to be 589 million CNY in 2025, down 7.1% from the previous year, with an estimated EPS of 0.65 CNY [4]. - The gross margin is projected to improve to 17.4% in 2025, with a net margin of 9.7% [4].