CITIC Steel(000708) 民生证券·2024-08-20 10:00Investment Rating - The report maintains a "Recommended" rating for the company with a target price of 11.76 yuan [2]. Core Views - The company reported a revenue of 13.66 billion yuan for H1 2024, a slight decrease of 0.4% year-on-year, while the net profit attributable to shareholders was 2.725 billion yuan, down 7.6% year-on-year [2][3]. - The sales volume increased by 0.99% year-on-year to 9.5155 million tons, with significant growth in bearing steel sales, which rose by 13.04% [2]. - The gross profit margin slightly declined by 1.32 percentage points to 13.59%, while the gross profit margin for special steel bars increased by 2.31 percentage points [2][3]. - Other income saw significant growth, reaching 6.21 billion yuan, driven by VAT input tax deductions [2]. Summary by Sections Financial Performance - For H1 2024, the company achieved a revenue of 13.66 billion yuan, a decrease of 0.4% year-on-year, and a net profit of 2.725 billion yuan, down 7.6% year-on-year [2]. - The company’s gross profit margin was 12.30%, reflecting a slight decline [3]. - The forecast for net profit attributable to shareholders for 2024-2026 is 5.497 billion, 6.129 billion, and 6.751 billion yuan respectively [2]. Market Position and Strategy - The company is focusing on high-end products to enhance resilience and is actively reducing costs and improving efficiency [2]. - The demand for special steel is expected to grow steadily, with significant opportunities in high-end gear steel, bearing steel, and other specialized products [2][3]. - The company has implemented measures to lower financing and operational costs, achieving improvements in various production indicators [2]. Future Outlook - The report highlights the potential for growth in high-end product sales and the optimization of industrial layout as key drivers for future performance [2]. - The company is expected to benefit from the gradual establishment of China's "dual circulation" development pattern, which will boost demand for special steel [2].