Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of RMB 7.25 [1][10]. Core Views - The company achieved a profit growth in H1 2025 despite a challenging operating environment in the steel industry, with a net profit of RMB 1.463 billion, representing an 18.63% year-on-year increase [7]. - The report anticipates that the implementation of anti-involution policies in the steel industry will further boost the company's performance [7][9]. Financial Performance - For H1 2025, the company reported revenue of RMB 28.944 billion, down 14.06% year-on-year, while Q2 revenue was RMB 14.592 billion, down 13.18% year-on-year but up 1.66% quarter-on-quarter [7]. - The company's high-end product sales reached 1.3372 million tons, accounting for 29.77% of total steel sales, with a gross margin of 20.26%, an increase of 2.32 percentage points year-on-year [8]. Industry Outlook - The steel industry is expected to see a recovery in profitability as the market bottomed out in Q3 2024, with a strategic shift towards anti-involution measures anticipated in 2025 [9]. - The average daily pig iron output in H1 2025 was approximately 2.355 million tons, a year-on-year increase of 3.4%, indicating that production cuts related to anti-involution policies have not yet been fully implemented [9]. Earnings Forecast - The company’s earnings per share (EPS) for 2025 is projected to be RMB 0.37, with expected EPS growth to RMB 0.45 in 2026 and RMB 0.49 in 2027 [6][10]. - The report maintains the profit forecast for the company, with net profit estimates of RMB 2.310 billion for 2025, RMB 2.745 billion for 2026, and RMB 3.029 billion for 2027 [6][10].

Core Insights - South Steel Co., Ltd. reported a revenue of 28.944 billion yuan for the first half of 2025, a year-on-year decrease of 14.06%, while net profit attributable to shareholders increased by 18.63% to 1.463 billion yuan [1] - The company plans to distribute a cash dividend of 1.186 yuan per 10 shares, totaling 731 million yuan, which accounts for 50% of the net profit attributable to shareholders [1] Financial Performance - The sales volume of advanced steel materials reached 1.3372 million tons, representing 29.77% of total steel product sales, an increase of 2.64 percentage points year-on-year [2] - The gross margin for advanced steel materials was 20.26%, up by 2.32 percentage points, with a total gross profit of 1.367 billion yuan, accounting for 46.67% of the total gross profit from steel products, an increase of 3.19% [2] Operational Efficiency - The company implemented multi-dimensional cost reduction measures, achieving a cost reduction of 307 million yuan in the M-end process [1] - South Steel has fully realized ultra-low emissions across all processes and has been recognized as an A-level enterprise for environmental performance in Jiangsu Province for two consecutive years [2] Research and Development - The company has increased its R&D investment, focusing on overcoming technical bottlenecks in advanced steel materials and key strategic materials [1] - South Steel collaborated with Huawei to launch the "Steel Big Model" initiative, aiming for technological breakthroughs and ecological collaboration [2] Sustainability Initiatives - The company completed a carbon inventory based on ISO 14064 standards and received relevant certification for the first time [3] - South Steel obtained the first carbon financial loan in Jiangsu Province's steel industry, with a credit line of 300 million yuan [3]

Core Insights - South Steel Co., Ltd. reported a revenue of 28.944 billion yuan for the first half of 2025, a year-on-year decrease of 14.06%, while net profit attributable to shareholders increased by 18.63% to 1.463 billion yuan [2] - The company plans to distribute a cash dividend of 1.186 yuan per 10 shares, totaling 731 million yuan, which accounts for 50% of the net profit attributable to shareholders [2] Financial Performance - The sales volume of advanced steel materials reached 1.3372 million tons, representing 29.77% of total steel product sales, an increase of 2.64 percentage points year-on-year [3] - The gross profit margin for advanced steel materials was 20.26%, up by 2.32 percentage points, with a total gross profit of 1.367 billion yuan, accounting for 46.67% of total steel product gross profit, an increase of 3.19% [3] Operational Efficiency - The company implemented various cost-reduction measures, achieving a cost reduction of 307 million yuan in the M-end process through product structure optimization, model innovation, procurement cost reduction, and financial expense reduction [2] - South Steel has fully achieved ultra-low emissions across all processes and has been recognized as an A-level enterprise for environmental performance in Jiangsu Province for two consecutive years [3] Research and Development - The company has increased its R&D investment, focusing on overcoming technical bottlenecks in advanced steel materials and key strategic materials [2] - South Steel collaborated with Huawei to launch the "Steel Big Model" initiative, aiming for technological breakthroughs and ecological collaboration [3] Sustainability Initiatives - The company completed a carbon inventory based on ISO 14064 standards and received relevant certification for the first time [4] - South Steel obtained the first carbon financial loan of 300 million yuan in Jiangsu Province's steel industry [4]