Investment Rating - The report maintains a "Buy" rating for the company with a target price of 31.68 CNY [6][3]. Core Views - The company has demonstrated strong profit growth, with a 26.39% year-on-year increase in revenue for the first half of 2025, reaching 6.105 billion CNY. The net profit attributable to the parent company increased by 36.44% to 804 million CNY [10]. - The gross margin for seamless pipes reached a new high of 34.35%, reflecting the company's competitive edge and cost advantages in high-end products [10]. - The company is well-positioned to benefit from the growing demand in deep-sea and acidic oil and gas markets, with over 60% of its revenue coming from these sectors. The company has established long-term partnerships with major global firms [10]. - The company is expanding its production capacity, with several key projects nearing completion, which is expected to inject new growth potential [10]. Financial Summary - Revenue projections for 2025-2027 are adjusted to 13.178 billion CNY, 10.823 billion CNY, and 11.289 billion CNY, respectively, with corresponding EPS estimates of 1.83 CNY, 1.62 CNY, and 1.70 CNY [3]. - The company’s financial metrics show a consistent increase in gross margin, net profit margin, and return on equity (ROE) over the forecast period [5][13]. - The projected net profit for 2025 is 1.787 billion CNY, with a year-on-year growth of 19.9% [5].

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company has demonstrated high-quality and high-speed growth, with significant market outperformance, achieving a compound annual growth rate (CAGR) of 8.5% in sales volume, 14.2% in revenue, and 22.3% in net profit attributable to the parent company over the past decade [11][19] - The company is positioned to benefit from the increasing demand for high-grade materials in the deep-sea and acidic oil and gas sectors, with a projected revenue share of approximately 63% from the oil and gas industry in 2024 [11][38] - The company is expanding its international presence, with overseas revenue contributing over 40% in 2024, driven by successful partnerships with major global oil companies [11][60] Summary by Sections 1. Value Reflection: Has the valuation reflected the company's high growth potential? - The company has achieved significant market outperformance, with its stock price increasing from 8.1 CNY per share in 2020 to 24.8 CNY per share by May 2025, representing a 204.5% increase [29] - The company’s effective expectation management has led to actual performance exceeding market forecasts, contributing to its strong valuation [31] 2. Main Business Recognition Bias: The trend towards deep-sea and acidic oil and gas, increasing demand for high-grade materials - The company’s products, primarily stainless steel and nickel-based alloy pipes, are essential for the corrosive environments of deep-sea and acidic oil and gas extraction [42] - The global deep-sea oil and gas production is expected to increase, with a projected CAGR of 3.5% from 2023 to 2030 [45] 3. Growth Expectation Bias: Advanced nickel-based material platform, broad opportunities in civil aviation and advanced nuclear power - The company is positioned to become a leading platform for nickel-based materials, with applications in civil aviation and advanced nuclear power, which are expected to provide significant growth opportunities [11][3] 4. Business Model: Long-termism, latecomer advantages, stable operations, high dividend potential - The company adheres to a long-term strategy focused on high-end products and international expansion, which is expected to enhance its market competitiveness [11][4] - The company has a strong cash flow and reserves, indicating potential for increased dividends in the future [11][4]