Nangang Co., Ltd. 2025 Annual Report Review

Source: Yiliu Investment Research Notes

Disclaimer: This article is for research and discussion purposes only and does not constitute any investment advice. The stock market carries risks; decisions should be made independently. Build your own logical framework and risk management system, and avoid following the crowd blindly.

Nanjing Steel Co., Ltd. released its 2025 annual report today. The performance looks decent, so I decided to take a brief look. The following comments were generated using the “Kouzi” skill (with some additional content I added). The structure is somewhat okay, but the results are not very satisfying. AI results are still average, or perhaps my prompt wording is too broad, and each industry might need specific prompts.

As a traditional industry, the steel sector has high business certainty and remains worth attention.

Financial Summary

Nanjing Steel achieved revenue of 57.994 billion yuan in 2025, down 6.17% year-over-year; net profit attributable to shareholders was 2.867 billion yuan, up 26.83%; net cash flow from operating activities was 3.674 billion yuan. The main drivers include: increased proportion of high-value-added products improving gross margin; application of low-carbon production technology reducing unit energy consumption costs; and supply chain optimization enhancing operational efficiency. Despite revenue decline due to weak industry demand, profit grew against the trend through product structure upgrades, indicating the company’s transformation strategy is beginning to show results.

Business Structure Analysis

In 2025, Nanjing Steel’s business structure features “steady steel main business, diversified synergy”: steel manufacturing revenue reached 37.242 billion yuan, accounting for 64.22% of total revenue, with a gross margin of 16.75%; coke business revenue was 5.726 billion yuan, accounting for 9.87%; other businesses (including new materials, environmental services, etc.) generated 15.026 billion yuan, accounting for 25.91%. Revenue from high-value-added products increased to 30.45%, with products like acid-resistant pipeline steel and high-end automotive sheets maintaining leading market share, becoming the core growth engine.

By product, revenue from special plates was 21.902 billion yuan, special steel long products 12.912 billion yuan, and construction rebar 2.429 billion yuan.

Capacity and Operations

Focusing on “capacity efficiency + green transformation,” Nanjing Steel’s capacity utilization rate in 2025 reached 89%, improving supply-demand matching. Energy consumption intensity decreased by 4.2% year-over-year, demonstrating significant results in low-carbon production. The company advanced capacity upgrade projects, eliminating 1.2 million tons of outdated capacity, aligning with the “dual carbon” policy.

Key achievements: capacity utilization at 89%, energy consumption intensity down 4.2%, 1.2 million tons of outdated capacity phased out, with green transformation and structural optimization progressing together.

Supply Chain Management

Nanjing Steel’s supply chain management centers on “cost control + resilience enhancement,” utilizing digital tools to improve procurement efficiency, optimize inventory turnover for faster response, and implement price risk management to cope with cost fluctuations. Due to high raw material dependence and price volatility in the steel industry, there is still room for management optimization.

Core strategy: focus on digital transformation and risk hedging, balancing efficiency and costs, strengthening supply chain resilience.

R&D and Technological Innovation

In 2025, R&D investment reached 2.312 billion yuan, accounting for 4.03% of revenue, maintaining industry-leading levels. The company filed over 1,100 patents during the year, including 208 PCT international patents. The hydrogen metallurgy demonstration project achieved key technological breakthroughs, successfully developing 12 types of high-end plates to replace imports. R&D innovation supports product upgrades and low-carbon transformation, serving as a key driver for profit growth during industry downturns.

Core value: R&D investment translates into technological breakthroughs, promoting import substitution and low-carbon processes, strengthening core competitiveness.

Smart Manufacturing Progress

In 2025, Nanjing Steel made significant advances in smart manufacturing. Its self-developed “Yuan-Ye” industrial large model was applied across the entire process, with data assets valued at 23.24 million yuan. AI models were used in over 50 scenarios, including quality inspection and energy optimization. Smart production lines increased efficiency by 18%, and equipment failure rates dropped by 22%. Digital transformation provides strong support for flexible production and cost control.

Core Competitiveness

Nanjing Steel’s core competitiveness lies in the “Technology + Products + Green” three-dimensional system: high-end product share reached 30.45%, with acid-resistant pipeline steel winning national manufacturing single champion titles; hydrogen metallurgy and low-carbon steelmaking technologies lead the industry, with energy consumption intensity 12% below industry average; digital management of the supply chain shortened raw material inventory turnover to 18 days, 25% better than industry average. These technological barriers and green production capabilities create differentiated competitive advantages, supporting leadership in high-end materials markets.

Strategic Planning and Transformation Path

By 2025, Nanjing Steel aims to accelerate its transformation from a traditional steel enterprise to a high-end materials service provider, focusing on new energy, high-end equipment, and marine engineering. Through a “technology R&D – product upgrade – market expansion” three-step strategy, it plans to increase high-value product proportion to 40%, expand hydrogen metallurgy capacity to 2 million tons, and develop a “green + intelligent” new steel manufacturing model, shifting from scale expansion to value creation.

Dividend Policy

The annual report states a cash dividend of 0.1372 yuan per share to all shareholders. Additionally, in mid-2025, a dividend of 0.1186 yuan per share was paid. Based on the closing price of 5.49 yuan (as of March 16, 2026), the annual dividend yield is approximately 4.66%.

Risk Warning

Key risks include: the transformation process facing increased pressure from “dual carbon” policies requiring low-carbon technology upgrades; potential escalation of international trade frictions affecting raw material import costs. The company must continue optimizing green production processes and strengthening supply chain resilience to address industry-specific risks.

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